Here’s a pointer to a Microsoft Knowledge base article on Hyper-v Dynamic Memory not working on Windows 2008 Standard & Web edition Hotfix: Hyper-V Dynamic Memory does not work on a Windows Server 2008 Standard Edition or Windows Web Server 2008 virtual machine (VM) As you probably already know you have a similar issue with Window 2008 R2 Standard and Web edition virtual machines which is fixed by installing SP1 in the guest. For the predecessor of R2 you need to install this hotfix.

The cause is that on these versions of the operating systems the the required memory enlightenment is supported. After installing the hotfix (or SP1 in the case of Windows 2008 R2) memory addition enlightenment is available on these SKU and your good to go.