I have an ugly coffee table-type setup in the TV room with all the past Nintendo consoles sitting there.
It's not actually a coffee table, it's more like a bedroom side-table thing. With the crowded top and all the cables between that and the TV/power outlets, it's not aesthetically pleasing.
I will still likely keep all my old consoles, but having the tiny Wii next to the DVD player and amplifier, I could essentially put away the entire table. It would make the room look SO much better, not to mention actually allowing space for the more insane Wii games, or having more people over to play some Wii.
The Virtual Console will allow me this setup without losing the games I would be putting away along with the old consoles. Except for maybe Killer Instinct and Killer Instinct Gold (due to them being by Rare(ware)), I imagine it shouldn't be a problem to re-buy my collection if I wanted to, as the majority of them from the Super NES onwards are Nintendo's own games.
However, it also depends on how the VC purchases/subscriptions/rentals/etc. actually work, and their prices/rates.