Windows 2008 VPS always crashes when out of disk space-Collection of common programming errors

It doesn’t really sound completely normal as I’ve had plenty of Windows servers both bare-metal and virtual run out of system volume disk without such fatal repercussions…

…but the magnitude of issues when it happens likely depends on both the virtualization platform/underlying storage and what services/applications are running in the guest when it happens. Depending on how the files are actually being written, file corruption sounds plausible though it happening each and every time seems like bad luck or a shaky platform.

Monitoring storage is definitely vital, as you say – as running out of disk should be considered as an undefined state (ie anything including nothing could happen).