Just last week virtualization.info covered the new product that FastScale is launching and that seems to bring the company away from its original strategy.
The CEO, Lynn LeBlanc, answered on this point in the comments section, but there was at least another interesting comment (unfortunately anonymous and so not verifiable):
I had heard that they were shopping themselves (SUN, HP/Bladelogic, VMware) with tepid interest because venture money has dried up. Must be even tougher to raise funds in this market with no customers.
As an answer to this assertion, today FastScale announces its second round of funding.
ATA Ventures provided them $5.5 million to continue to virtualize the connection between the application and the operating systems components (no, its a different approach from the application virtualization that we are used to).