I've been a fan of the vRAM based entitlement because it is tied to what is often the most key scaling factor in a virtual environment - RAM. Even though it did not impact my environment, I felt the initial entitlements were much to low for modern hardware, applications, and operating systems. Furthermore as VMware touted increased scalability in 5.0, the initial entitlement calculations indicated one would pay heavily from the pocketbook to take advantage of those improvements.
VMware was listening and has responded more quickly than could have been expected! Given the constant improvements in hardware and decreasing costs, I am a bit curious how much of a tail chasing situation this could end up being.
Go read Gabe's article for the details.