This is a big difference. Typically, with traditional backup, you put the agent on there, we're backing up the files, and everyone's happy. If we need to restore a file or an email, it's fairly simple. We go back into the agent and recover it.
In a virtual server environment, the actual virtual machine image is stored as a single file. So, that's very different. The operating system, the applications, and the data itself is all stored within a single file.
In VMware, this is called a VMDK file. With Microsoft it's called a VHD file.
Check out the entire Virtual server backup FAQ
