I was torn between putting this question on this site or SuperUsers. I've tried to do a good bit of searching on this, and while I find plenty of info on why to go with a VM or not, there isn't much practical advise on HOW to best set things up. Here's what I currently HAVE:

• HP EliteBook 1540, quad-core, 8GB memory, 500GB 7200 RPM HD, eSATA port. Descent machine. Should work just fine.
• Windows 7 64-bit Host OS. This also acts as my day-to-day basic stuff (email, Word Docs, etc...) OS.
• VMWare Desktop
• Windows 7 64-bit Guest OS with all my .NET dev tools, frameworks, etc loaded on it. It's configured to use 2 cores and up to 6GB of memory. I figure that the dev env will need more than email, word, etc...

So, this seemed like a good option to me, but I find with the VM running, things tend to slow down all around on both the host and guest OS. Memory and CPU utilization don't seem to be an issue, but I/O does. I tried running the VM on an external eSATA drive, figuring that the extra channel might pick up the slack. Things only got worse (could be my eSATA enclosure).

So, for all of that I have basically two questions in one.

1. Has anyone used this sort of setup and are there any gotchas either around the VMWare configuration or anything else I may have missed here that you can point me to?
2. Is there another option that might work better? For example, I've considered trying a lighter weight Host OS and run both of my environments as VMs? I tried this with Server 2008 Hyper-V, but I lose too much laptop functionality going this route, so I never completed setup. I'm not averse to Linux as a host OS, though I'm no Linux expert.

If I'm missing any critical info, feel free to ask.

Thanks in advance for your help.

Steve