We monitor our VM's the same way we monitor our physical boxes.
We have an IBM setup, so we are authorized to put the Director agent on all of our VM's (running on IBM hardware).
It will send e-mail alerts, SNMP traps, etc.
If you have HP, Insight Manager will do this for you, and like IBM, it has a VM add-on.
Not 100% about Dell or any others.
Also Microsoft Operations Manager 2005 will do it with the MOM Agent in the VM (can be pricey, but maybe not when someone figures out the licensing in VM's).
Also Solarwind's Orion will do this too.
Just treat them like physical boxes, and you should be ok.