You can also "cheat" Virtualbox in this section.
Select "Windows 7 or 8" in General.
This will allow you to have more than 128MB of Video Memory.
Set it to whatever you want.
Return to General and select Linux.
Video memory will retain the setting.
I don't know if there is an obvious reason for VirtualBox not allowing more than 128MB of Video Memory on Linux VMs...
