If I got the 4 core dedicated server, being HT that would give me 8 cores to choose from for a virtual environment right?
If you bought a four core dedicated server then yes that would give you 8HT cores to use.
If so, how many can i virtualize before I bottleneck the main system?
Well in theory you could use them all and bottle necking the system should only happen when there are not enough resources to go around. It really depends on what you are doing. I would personally keep a core and enough memory for the OS..etc to run smoothly then the rest you can make virtual.