Hilton Lange over at the offical SCVMM Blog has posted a fantastic write-up of the mechanics of Dynamic Optimization.
Of particular interest to me is the logic used to determine whether or not to rebalance a cluster. I’ve seen clusters before where Network Optimizations have been enabled and DO does not balance any VMs at all however live migrations work. This is caused by warnings generated during the evaluation process as a result of Network Optimization not being supported on the hardware and as you can see from the above link, any warnings means a host is discounted. Unfortunately there isn’t much information in SCVMM itself about the results of the logic when DO runs; vSphere is a bit better in that regard.