"Paravirtualization has been available in the VMware Workstation product since version 6, but it also requires guest kernel changes. Linux kernel 2.6.20 and above support pv, look for CONFIG_VMI=y in kernel config. The latest Ubuntu release has this enabled by default. You also need to check the paravirtualized kernel flag in the VMware Workstation and ESX Server Advanced settings under the Options tab.
Paravirtualization in Linux has quite a few moving parts to it, and affects mostly performance metrics and timekeeping functions. The best example is %steal time, which is the time that the virtual guest wanted to run, but was not able to, usually due to contention with other VM guests. This time was previously only visible to the virtual host, but can now be seen by the guest. Paravirtualized guests do run faster, and certainly feel more responsive when using a Linux GUI like KDE on a virtual guest.
Other advances from VMware are things like "VMDesched", which is an experimental feature in VMware Tools that creates a thread that is charged all the involuntary preemption time from the physical CPU."