I've had the same issue with both VBox and VMWare.
In both cases it turned out to be a problem with my kernel HID driver, and an upgrade of the HID, keybd, and the matching virtual-keyboard drivers from the latest source code tip (for my kernel branch and the version of the VM source I was using) fixed the problem.
That may or may not fix your issue, but it's worth a try.

==Joseph++

kitepilot@kitepilot.com wrote:
> Good morning Universe...
> I have now Virtual Box (virtualbox-ose) installed on my Kubuntu 10.04
> box, but this issue has cropped up in previous box/VBox instances.
> Most times (if not always), my Virtual Box OS matches my bare-metal OS.
> This is what happens:
> I type in the keyboard and the virtual machine hangs.
> Overtime, somehow, I discovered that the virtual box is apparently
> receiving a FLOOD of keys from the keyboard.
> This happens mostly when (imagine that) I hold down a particular key
> (like an arrow), but it has happened on just any key.
> Sometimes, I don't even have to hold it...
> I was just typing:
> ls -la
> And I am getting in my shell:
> lllllllllllllllllllllllllllsssssssssssssssssss         -------------
> Get the drift?
> If I have the virtual machine acting full screen, I can't even reach the
> virtual box with the keyboard.
> In fact, I gave up running full-screen :( so I can access the metal when
> this happens and ssh into the virtual for forensics.
> Then the last evolution:
> I ssh(ed) into the virtual box as it looked hung and finally caved in
> and did "sudo reboot"
> Surprise, surprise, the box rebooted, but the keyboard to the virtual
> machine is still unresponsive...
> What are bullets going for nowadays, last time I checked is was
> borderline impossible to get ammo...   :(
> ET