I'm used to rolling my own kernels for servers, as it nicely minimizes the number of exploits (and the resulting patches) to take care of.

In a traditional (bare metal) world, the whole process is about knowing what you have (hardware), and what you need (Ethernet, IPv4, iptables, etc.) In a virtualized environment, some things stay the same (still need Ethernet and IPv4), some things go away (power management), and then there are some new needs (vxnet3, or vmware-tools, even though that's compiled outside of the kernel).

So my question mostly concerns itself with the last two categories: what can I remove completely, and what new stuff do I want?

For example, what IO scheduler do I want, if all my disk operations are going through another filesystem/scheduler/cache to get to the virtual disk? Do I need hyper-threading enabled, or is the VM going to show them to me anyway as a CPU anyway? Do I need Large Receive Offload turned on, or is that something that the hypervisor's network drivers are going to do for me?