I read that firewalls do not always work well in a virtual environment;
I would say that it is untrue.
To protect VPS server, every web host have their security patches so there is no issue whether firewall is installed or not. In terms of extra security you should opt software firewall on your VPS account.
OpenVZ is a filebase virtualization and the firewall setting in fact most depends on the host node compare to Xen VPS which is more isolated environment, so it shouldn't have any issue.
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As someone who specializes in VPS security is our main concern. We take a proactive approach and we actually try and find vulnerabilities, sometimes we do and we resolve them and look for more. It is a computer and no matter what someone out there is going to look for openings in your security and they will exploit them if they can.
But as mentioned above VPS servers give you great flexibility to try things. Remember ask questions, have fun experiment you might learn something.
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The only problem you you might have with Virtuozo is a incompatability with ip_conntrack which will affect your ftp clients with the firewall up, but you can configure FTP to use a range of ports, which you can configure the firewall to allow.
Firewall is just another step to increase security, but it does not secure your vps/dedicated server 100%. You should take further steps and install RootKit Hunter, secure ssh, etc. There are many guides just google.