I don't use VM, but in reading your posts, it sounds like there are some troubleshooting steps you can try on your respective setups:
1) Use the older XP-only version of PalmDesktop (I don't recall for sure, but I think it's 4.x vs the Vista-enabled 6.x version). The vista version installed apps just fine for me, but it didn't seem to sync up the data. I could very well be wrong here in that I didn't test this setup much.
2) Within the hotsync manager setup, not only do you need to check the settings to allow a network sync, but you also need to configure the network sync to specify what ip addresses are allowed to connect to it. By default, I think it restricts it to the last subnet. If that's true, that might explain why skatebiker got closer to making it all work in his 2nd attempt with fixed 192.168.1.x addresses compared to his 1st split 192.168.0.x and 192.168.122.x attempt.
3) In the hotsync setup, restrict syncing to only contacts, calendar entries, memos, todos, and installs (aka be sure to disable backups). I found that the backup option seemed to error out all the time. Since all the data is in your garnet data file, you can manually just backup your data file (/home/user/.gvm/gvm.store).
4) After what looked like a good sync (aka hotsync logs said it was successful and I believe it mentioned something about records exchanged), I couldn't find the records in any of the apps in the system. I didn't spend much time looking into it, but I *think* there's a garnet daemon that's running behind the scenes that needs to be somehow refreshed. Rather than spend the time figuring it what it was and how to refresh it, I just rebooted my phone. In getting back in, I found all the data there as expected.

Hopefully, some of what I experienced might help you guys get up and running. If/when you do get to that point, another thing I found is the vm hotsync didn't save my sync host setting. To fix this, I just manually edited my /home/user/.gvm/gvm_settings file to add my sync host (under syncHostname).

Also, I noticed that even without that setting, once I was able to successfully sync to one box, I couldn't seem to change the sync host to a different box. It's not that important, but if any of you figure out why that is, I'd love to hear it. A normal palm device has internal hotsync settings that save the info for the master sync host that it'll allow you to change. Unfortunately, the garnet vm doesn't include that internal hotsync settings manager app.