>> Want to run 2 4GB KVM VMs?  The host needs to have more than 8GB available
>> to it in order to dedicate RAM to the VMs as well as manage its own
>> resources.

Not necessarily, and usually it's not so. It depends a lot on the
workload on the guest systems and on the ability of the virtualization
layer to handle a memory pressure scenario.

> but i have given 3GB for my VM where the base system has 2GB of RAM.
> i was just testing not for production.
>
> Base OS is Fedora 14 and Guest is RHEL6

This guest memory overcommitting is possible by:

- using swap memory of the host system;
- using memory overcommit on the host system;
- using ksm on the host system.

(possibly others, this is not intended to be an exhaustive list).

You can check that there isn't any magic involved in this by running a
small program on the guest that allocates big chunks of memory and
fill them with data from /dev/urandom (to defeat the ksm merging
mechanism) (of course without releasing the memory area after having
filled it).

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