Who is actually sharing physical RAM in a distributed sytem that has virtual shared memory? (Server and/or clients.)
Either the host server or the clients can create DSM, or both.  It's likely that a server hosting the applications would manage this.  The host server may create shared memory, or it may direct the clients to do this, and share the memory among themselves, preserving its own memory.  

Distributed Shared Memory is an abstraction.  A "server" creates shared memory, and a "client" makes a copy of it in its own memory.  The O/S or middleware keeps them in sync. A "client" for purposes of working of host server, may be a "server" regarding creating shared memory.  This client/server terminology is used in both contexts. When you read about shared memory you will often see the terminology used this way - the computer initiating the creation of DSM (distributed shared memory) is the "server" for that purpose.