Hi,
never tried 4 bit with Virtualbox, but I am running Windows XP SP3 with 32bit and Ubuntu 8.04 with 32 bit inside Virtualbox for OS/2. SDL is the latest, but haven't had problems with the one shipped with Virtualbox so far.
All though - have problems with other SDL applications as well: Notably Dosbox and ScummVM. ScummVM is not working unless I use 32bit colour, if I use 16 bit there is a totally wasted screen. But - even with 32bit - the programms (I.e. Broken Sword, Curse of Monkey Island III) are starting but are mostly using "blue colours", so some are missing. Everything looks blue. If using Windows 3.11 (the Original) inside DOSBOX, the Window colours are brown instead of Blue....
User Shai reported, he was able to solve some problems with telling DosBox Sessons to start in Fullscreen Mode, but this did not work for me.
Even though it is mentioned in the latest SDL build Readme, that some problems with "Panorama" have been corrected, the one I was able to figure out is, that Fullscreen DosBoxSession are possilbe now. But still have the "wrong" or "missing colours - don't know wich it is) problems.
Looking forward to see a solution for this!
Cheers