The virtual checkbox does the same things as not using it, except
1) it won't dedicate the whole IP to that one NS (it won't show up in the ip list)
2) it will use the same IPs that the main system nameservers are using (admin settings)
It allows a Reseller who only has 1 shared IP to create nameservers on 2 IPs (which he doesn't own).
Adding nameservers through DA can easily be duplicated by adding NS records and A records for ns1 and ns2. Not much to it
If you've got 127.0.0.1 in your /etc/resolv.conf file, then your nameserver is a caching nameserver, which will result in errors when you look up your domain at DNS Report.