Why is it a bad idea to have CPU and memory reservations on every VM in a cluster? I am trying to find more information. Below is one good response. I would appreciate if anyone can offer additional feedback on this topic.
Setting memory reservation has impact on the VM itself and its surroundings. Setting reservation per VM is not best practice; it is advised to create resource pools instead of per V M reservations. Setting reservations on a granular level leads to increased administrative and operational overhead. But when the situation demands to use per VM reservation, in which way can a reservation be set to guarantee as much performance as possible without wasting physical memory and with as less impact as possible. The answer: set reservation equal to the average Guest Memory Usage of the VMs.
Pasted from <http://frankdenneman.nl/2009/12/08/impact-of-memory-reservation/>