The Guest Additions can change the amount of host memory that a VM uses, while the machine is running. Because of how this is implemented, this feature is called memory ballooning.

Normally, to change the amount of memory allocated to a virtual machine, you have to shut down the virtual machine entirely and modify its settings. With memory ballooning, memory that was allocated for a virtual machine can be given to another virtual machine without having to shut the machine down.

When memory ballooning is requested, the Oracle VM VirtualBox Guest Additions, which run inside the guest, allocate physical memory from the guest operating system on the kernel level and lock this memory down in the guest. This ensures that the guest will not use that memory any longer. No guest applications can allocate it, and the guest kernel will not use it either. Oracle VM VirtualBox can then reuse this memory and give it to another virtual machine.

The memory made available through the ballooning mechanism is only available for reuse by Oracle VM VirtualBox. It is not returned as free memory to the host. Requesting balloon memory from a running guest will therefore not increase the amount of free, unallocated memory on the host. Effectively, memory ballooning is therefore a memory overcommitment mechanism for multiple virtual machines while they are running. This can be useful to temporarily start another machine, or in more complicated environments, for sophisticated memory management of many virtual machines that may be running in parallel depending on how memory is used by the guests.

At this time, memory ballooning is only supported throughVBoxManage. Use the following command to increase or decrease the size of the memory balloon within a running virtual machine that has Guest Additions installed:

VBoxManage controlvm "VM name" guestmemoryballoon n

where VM name is the name or UUID of the virtual machine in question and n is the amount of memory to allocate from the guest in megabytes. See Section 8.14, “VBoxManage controlvm”.

You can also set a default balloon that will automatically be requested from the VM every time after it has started up with the following command:

VBoxManage modifyvm "VM name" --guestmemoryballoon n

By default, no balloon memory is allocated. This is a VM setting, like other modifyvm settings, and therefore can only be set while the machine is shut down. See Section 8.8, “VBoxManage modifyvm”.

http://www.virtualbox.org/manual/ch04.html#guestadd-balloon