A: In previous versions of System VMM, virtual machine (VM) load balancing was handled by VMM’s Performance and Resource Optimization (PRO) functionality. PRO requires VMM’s integration with System Center Operations Manager, and relies on host-based CPU and memory utilization counters to determine host load.

Dynamic optimization in VMM 2012 replaces PRO’s load balancing with a new set of cluster-aware monitors and load calculations. This new approach improves the efficacy of VMM’s load balancing activities. With VMM 2012, frequency and aggressiveness settings can be customized to determine how often a cluster is rebalanced and the tolerance for imbalance. Higher levels of aggressiveness require more VM migrations to achieve a better balance of resources. Those additional migrations require resources to complete, so finding the right fit between balance and required migrations will be a tradeoff.

Specific details aren't available yet, but Microsoft documented this new VMM 2012 functionality on TechNet.