Microsoft has said that any Virtual Server extensions for Red Hat Linux would be developed specifically by Red Hat. Since the Fedora breed of Red Hat is not as broadly supported, it's probably not likely that we'll see Virtual Server additions for Fedora.
There are a couple of ways that the sluggish feedback problem can be ameliorated. One is to reserve at least 20% CPU for that particular virtual machine. Another method which seems to be more generically successful is to install Fedora Core, then configure the following display options after the first phase of installation is over. For the monitor, choose Generic LCD. Set the resolution to 1024x768. Choose 16-bit color depth (a.k.a. thousands of colors). This should help ameliorate much of the slow display feedback.
Another possibility is to use virtual network computing (VNC) or another third-part remote connection to the Fedora server rather than Virtual Server's own display.