The amount of memory assigned/granted to a VM depends on the VM's demand. If a VM requires a certain amount of memory, VMware grants the required memory to the VM. Since VMware doesn't know what the VM is using this memory for and which pages are actually used, it cannot revoke the granted memory. In case of contention however, techniques like ballooning (provided VMware Tools are installed in the guests) come into play, where the ballooning driver in the guest inflates (depending on the current guest OS memory usage) and provides the "borrowed" memory to the vmware process running on the host in order to use it for other guests.
André
