The advent of deep sub-micron technology has recently highlighted the criticality of the on-chip interconnects. As diminishing feature sizes have led to increases in global wiring delays, Network-on-Chip (NoC) architectures are viewed as a possible solution to the wiring challenge and have recently crystallized into a significant research thrust. Both NoC performance and energy budget depend heavily on the routers' buffer resources. This paper introduces a novel unified buffer structure, called the dynamic Virtual Channel Regulator (ViChaR), which dynamically allocates Virtual Channels (VC) and buffer resources according to network traffic conditions. ViChaR maximizes throughput by dispensing a variable number of VCs on demand. Simulation results using a cycle-accurate simulator show a performance increase of 25% on average over an equal-size generic router buffer, or similar performance using a 50% smaller buffer. ViChaR's ability to provide similar performance with half the buffer size of a generic router is of paramount importance, since this can yield total area and power savings of 30% and 34%, respectively, based on synthesized designs in 90 nm technology.