I'm head of the IT department at the small business I work for, however I am primarily a software architect and all of my system administration experience and knowledge is ancillary to software development. At some point this year or next we will be looking at upgrading our workstation environment to a uniform Windows 7 / Office 2010 environment as opposed to the hodge podge collection of various OEM licensed editions of software that are on each different machine.

It occurred to me that it is probably possible to forgo upgrading each workstation and instead have it be a dumb terminal to access a virutalization server and have their entire virtual workstation hosted on the server.

Now I know basically anything is possible but is this a feasible solution for a small business (25-50 work stations)? Assuming that this is feasible, what type of rough guidelines exist for calculating the required server resources needed for this.

How exactly do solutions handle a user accessing their VM, do they log on normally to their physical workstation and then use remote desktop to access their VM, or is it usually done with a client piece of software to negotiate this?

What types of software available for administering and monitoring these VM's, can this functionality be achieved out of box with Microsoft Server 2008? I'm mostly interested in these questions relating to Server 2008 with Hyper-V but fell free to offer insight with VMware's product line up, especially if there's any compelling reasons to choose them over Hyper-V in a Microsoft shop.

Edit: Just to add some more information on implementation goals would be to upgrade our platform from a Win2k3 / XP environment to a full Windows 2008 / Win7 platform without having to perform any of that associated work with our each differently configured workstation.

Also could anyone offer any realistic guidelines for how big of hardware is needed to support 25-50 workstations virtually? The majority the workstations do nothing except Office, Outlook and web. The only high demand workstations are the development workstations which would keep everything local.