Install Backup Exec 2014 on virtual machine??

As you have mentioned writing to tape then passthrough access to physical tape hardware from inside a VM is not supported and from reports by the few custoemrs that have tried it, will sometimes work, but gives all sorts of seemingly random/intermittent problems.

If your tape drive/libary is on our HCL against an iSCSI connection (so not SCSI or FC), then that should work with a virtual media server and would be supported. Note the library itself must directly support iSCSI don't try to use a software iSCSI solution.

Please also note: if your domain is moving to Windows 2012 R2, then for full functionality the media server itself wil have to be running in Windows 2012 R2 as well.

I'm thinking about using a virtual machine, since our media server is getting old and we use a Data Domain appliance and DDBoost to do the backups anyway. That means that all of the storage is attached via 10Gb Ethernet anyway (though our Data Domain only has 1Gb), and most of the traffic goes between the backup target and the Data Domain or between our in-house Data Domain and hosted Data Domain, rather than through the media server. When major traffic does through the media server, it's because of server-side deduplication via DDBoost with SAN transport. I was actually wondering if there is a virtual appliance out there at this point (perhaps on Linux)? I guess not, since there are still discussions about supporting a virtual media server.

I really think the key is that if you have hardware that needs to be attached to a physical server, the supported configuration would be to use that physical server.