I am developing a scientific application used to perform physical simulations. The algorithms used are O(n3), so for a large set of data it takes a very long time to process.
Ten years ago, the company I worked for looked at a similar virtualization solution, and Sun, Digital and HP all supported it at the time, but only with state-of-the-art supercomputers with hardware hotswap and the like. Since then, I heard Linux supports the type of virtualization you're looking for for solution #3, but I've never used it myself.
However, if you do matrix calculations you'd want to do them in native code, not in Java (assuming you're using Java primitives). Especially cache misses are very costly, and interleaving in your arrays will kill performance. Non-interleaved chunks of memory in your matrices and native code will get you most of the speedup without additional hardware.