For a given dual-core or quad-core solution with 4-8 GB memory, what is the falloff in application performance with each added Virtual Session?
The falloff would probably depend entirely on the applications running in each virtual session. If you have several virtual sessions that don't have more than 5-10% total system usage, they're probably going to be a lot less stressful than one or two sessions that use a lot of CPU or memory bandwidth.
The best way to find out the load capacity on any given system is to perform real-world testing. One particularly...
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interesting tool I've come across is a standalone Linux distribution called StressLinux, which can be run in a given machine instance and contains a slew of utilities that can be used to simulate various kinds of loads.