I postulated a while back that the virtual machine would eventually be the target of web application design[1]. I wrote an honours project proposal for a blog engine based on reckoning that if you can control a (virtual) machine from the bottom up, why stay trapped in the architectural constraints of shared hosting?
At the time I referred to the Mirage project, which was an OCaml runtime ported to sit directly on Xen [2]; later HalVM came along and did the same for Haskell [3].
This one is particularly neat because they've built more packaging and framework around it to support fast creation and destruction of instances.
I think this is an exciting time. The sooner people stop targeting shared servers as their architectural baseline, the sooner we can start to see genuine architectural innovation again. Right now all the architectural innovation is hidden in one-shot apps and inside companies. It needs to trickle down.
[1] http://clubtroppo.com.au/2008/07/10/shared-hosting-is-doomed...