The basic premise of a Beowulf cluster is HPC - High Performance Computing.
One very good resource is
this.
Standard architecture of a Beowulf cluster is to have one "controller" node which parcels out processing tasks for the individual nodes that it controls. Depending on the type of application, you would have maybe one controller node per 16 to 256 'work' nodes. Each of these "compute farms" can then be controlled by a master controller node, which may control from 4-16 "farms". Each of these farm controllers could also be controlled by a master controller, which might look after the work assignments of 4-16 'farms' and so on. One very good illustration of a Beowulf
type application is a CGI Render farm (incidentally, my new job as of 5th January is in charge of looking after the CGI render farm at Pinewood Studios!)

The image on the left shows one Beowulf "farm"
Unfortunately, running any sort of commodity software on a Beowulf cluster is pretty much a physical impossibility. Software does have to be specifically written using a technique based upon "message passing" which allows long and complicated calculations to be broken out into individual segments that can be pushed out to an individual node to complete.
So, the only real reason to build a Beowulf cluster (apart from the geek factor, which I totally understand ! ) is if you have access to programmers who can write software that is targetted for this sort of environment.
HoweverThere's always a 'but'.
There is a software package called
MOSIX which will allow you to use a cluster of computers as a single compute farm. Essentially, you set up a bunch of computers running Linux, and install MOSIX on them. Then, you can start any process on any one of the computers, and MOSIX will automatically find the best "resource" for that program to run on. MOSIX does work at the Process level, so it
might allow you to spread the load of running a VM over multiple machines, but I really couldn't comment on how well this would work. There are a few caveats, such as you need to have shared storage (like a NAS box, or another machine running OpenFiler for example). The MOSIX site makes for some very interesting reading though!
Hope that helps!
B.