I do want to chime in - hopefull, this is of value.
The VSS support that VMware provides today for both Windows 2003 and 2008 (the various permuatations) provide application consistent quiesced snapshots. As part of providing application consistent quiesced snapshots, VSS will tell the application to ensure that there are no transaction in transit before "stunning" the application so that the snapshot can be taken.
As you know, SQL stores data is the database and transaction logs - with the transaction log being the first place where the data is written. When the stun is done and the snapshot taken, both the database and the transaction logs will be in application consistent state. Hypothetically, if you loose the VM and need to restore the VM from this backup/snapshot, the SQL data will be application consistent.
What the VMware VSS implementation does not do is truncate the transaction logs.
Depending on the expectation owner of the application, some are fine with manually truncating the logs inside the app/SQL (or running a script). Others application owners expect the backup operation to automatically perform this as part of the backup operation.