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With the release of the SP1 for Windows Server 2008 R2. Microsoft will be releasing the new feature for Hyper-V : Dynamic Memory.

But what Dynamic Memory will do?

Dynamic memory is an enhancement to Hyper-V in R2 and allows IT administrators to pool all the memory available on a physical host and dynamically distribute it to virtual machines running on that host as necessary. That means based on changes in workload, your VMs will be able to receive new memory allocations without a service interruption.

At a high level, Hyper-V Dynamic Memory is a memory management enhancement for Hyper-V designed for production use that enables customers to achieve higher consolidation/VM density ratios

To be Clear : Dynamic memory is allocating ram automatically among guest depending on usage. You still can’t allocate more RAM than what you have physically