Sure, you can run Virtual Center Management Server as a Virtual Machine. VMware supports it and has published a technical note about doing it - http://www.vmware.com/pdf/vi3_vc_in_vm.pdf. A lot of companies have built their VC2 server this way, but is it really wise to have “the manager” of the environment running in the environment it is managing?
Think about it. Virtual Center provides VMotion which in turn enables DRS and HA. Agents running on each ESX host are communicating back to VirtualCenter for these features to work. A lot could go wrong with some pretty severe consequences. This is even worse if a company has completely virtualized their network services such as DNS. I’ve personally seen where a client “shot themselves in the foot” because Virtual Center and all networking services where provided by VMs.
In my opinion the VMware tech note is a not exactly a “glowing endorsement” for installing VC2 in a VM. It is best practices guide that explains critical design criteria.
First, why would you put VC2 in a VM? The tech note begins by offering some good reasons: