Not a lot of deployments these days still have a physical vCenter server. The benefits of running it in top of your vSphere environment out weigh the need for a physical box.
If the ESXi host that your VC server is running on dies, HA will restart the VC VM on another node in the clister. HA doesnt rely on vCwnter server. What happens if the physical box your vCenter server is installed on dies?
IF you need to shut down your entire virtual environment, this is doable as well. My recommendation would be to have a management cluster, and vCenter would sit within the management cluster. But I understand not all business can afford / justify this. If you needed to shut down the environment and you want to know where vCenter is (so you can shut it down last and power it up first), you can disable automatic DRS on the cluster so VMs stop being migrated around. When you get to the last host where the VC machine is located, log into the host with the Embedded Host Web Client or the c# client and shut down the remaining machines on that host.
VMware recommend deploying the appliance for VC/PSC, and this can only be deployed as a virtual machine.
Hopefully this helps.
Cheers, Matt.