It's great to see this project getting off the ground!
Our group is very interested in this idea. We have been working with wide-area VM appliance Condor pools for a couple of years and have developed a peer-to-peer virtual network (IP-over-P2P, or IPOP) that supports decentralized NAT traversal with techniques including hole-punching and proxying. We've found this to be very useful to facilitate the deployment of ad-hoc wide-area Condor pools/flocks where nodes are increasingly behind NATs. The IPOP code is also open source and user level (though it currently uses a tap device), so I thought this would be of interest to the list. Here are some pointers for more information (and software):
http://grid-appliance.org http://ipop-project.org
We're starting a collaboration with the Condor group on a particular application of this virtual infrastructure for computer architecture simulation (http://archer-project.org); hopefully sharing our experience with this system can benefit nightlife and vice-versa.
Bests, --rf