DB2 9.7 memory and process architecture is very much different from that of DB2 8. Try to avoid adding virtualization complexity to the migration process. Your best bet would be to set up a real (not virtualized) DB2 9.7 environment and subject it to as much stress testing as you can provide. Begin with setting most parameters to AUTOMATIC, allowing the DB2 self-tuning memory manager (STMM) to do its job. Monitor the database and application performance and adjust the parameters where necessary.
Once you are happy with the database performance, you can move it into a virtualized environment and verify, via additional stress testing, that it behaves as desired. In most cases you should not over-allocate virtual RAM and storage: define only as much virtual RAM as you have physically installed, and map each virtual LV to a real one. CPU can often be over-allocated, but that also depends on your actual system performance.