What operating system does the the Virtual have installed on it? Server 2003 just acts as the host OS for the Virtual Machine. If you are running Virtual Server then you would be installing System Integrator on to the Virtual Machine...not the host OS (Server 2003). For instance, if you create an XP virtual image then you be would installing SI on XP...not Server 2003 R2.
Likewise with the remote connection...if the Virtual machine is always running on the server then you should be connecting remotely to the VM. As opposed to connecting remotely to the Server thats running Virtual Server. Make sense?