If you are deploying virtual machines for multiple customers on a single physical host, what should be recommended to isolate VMs from one another?

you can use vSheild from VMWare, plus most of the modern firewalls have plugins to integrate with VMware or Hyper-V

virtualization itself is about isolating machines. virtual machines are working the way physical mashines do but sharing only the resourses (processors, memory or NICs).

the answer is (they are already isolated).

In VMware solution you can you vshield appliance to isolate and secure VMs.

Define Ports for each VMs along with their IPs. and make a rule and apply on them for which those VMs are associated. And deny all other irrelivant activities.

what is meant by isolating machines ?

You mean the Network Cards or the place where the machines are stored