Server consolidation using virtualization technology has become increasingly important for improving data center efficiency. It enables one physical server to host multiple independent virtual machines (VMs), and the transparent movement of workloads from one server to another. Fine-grained virtual machine resource allocation and reallocation are possible in order to meet the performance targets of applications running on virtual machines. On the other hand, these capabilities create demands on system management, especially for large-scale data centers. In this paper, a two-level control system is proposed to manage the mappings of workloads to VMs and VMs to physical resources. The focus is on the VM placement problem which is posed as a multi-objective optimization problem of simultaneously minimizing total resource wastage, power consumption and thermal dissipation costs. An improved genetic algorithm with fuzzy multi-objective evaluation is proposed for efficiently searching the large solution space and conveniently combining possibly conflicting objectives. The simulation-based evaluation using power-consumption and thermal-dissipation models based on profiling of a Blade Center, demonstrates the good performance, scalability and robustness of our proposed approach. Compared with four well-known bin-packing algorithms and two single-objective approaches, the solutions obtained from our approach seek good balance among the conflicting objectives while others cannot.