Virtual Earth has a lot of options for for working with shapes, unfortunately there are so many additional options that are not document (thus unsupported) that are available. However, just because it's not documented doesn't mean it can't be used, it just means that it may break at any time and if it does then it's no ones fault but your own. Now that the fair warning is out of the way here is how to draw dashed polylines.

Before adding a polyline to the map set the VEShapeStyle.prototype.stroke_dashstyle  property to one of the following:

• Solid
• DashDot
• ShortDash
• ShortDot
• ShortDashDot
• ShortDashDotDot
• Dot
• Dash
• LongDash
• LongDashDot
• LongDashDotDot

For an added effect, resize the width of the polyline based on the zoom level.

I've put together a nice little sample of how to do this which can be downloaded here:

http://cid-e7dba9a4bfd458c5.skydrive.live.com/self.aspx/VE%20Sample%20code/dashedLines.zip

Here is a screen shot of what the sample program looks like: