What are practical advantages of using linux-image-virtual kernel?

The difference between the Virtual and Server kernels is that the Virtual kernel is intended to be utilized inside a virtual machine. The virtual kernel only includes the necessary drivers to run inside popular virtualization technologies such as KVM, Xen, and VMWare. The server kernel in contrast contains the necessary drivers to work with a wide range of hardware, and should be installed directly on host systems. Other than that, all other options are identical between the server and the virtual kernel.

https://help.ubuntu.com/community/ServerFaq#What_are_the_differences_between_the_server_and_virtual_kernels.3F

The difference is that the virtual kernel only bundles drivers needed for the common virtual hardware devices instead of all the modules for real-world hardware.

So it is considerably smaller in terms of disk space. I'm not aware of any tuning for performance or any functional difference that way, I think it's just for smaller images.

http://ubuntuforums.org/showthread.php?t=1635961