Hardware errors are no longer exceptions in modern cloud data centers. Although virtualization provides software failure isolation among different virtual machines (VM), the virtualization infrastructure including the hypervisor and privileged VMs remains vulnerable to hardware errors. What makes matters worse is that such errors are unlikely bounded by the virtualization boundary and may lead to loss of work in multiple guest VMs due to unexpected and/or mishandled failures. To understand reliability implication of hardware errors in virtualized systems, in this paper we develop a simulation-based framework that enables a comprehensive fault injection study on the hypervisor with a wide range of configurations. Our analysis shows that, in current systems, many hardware errors can propagate through various paths for an extended time before an observed failure (e.g., whole system crash). We further discuss the challenges of designing error tolerance techniques for the hypervisor.