I have been working with Virtual Machines for a long time. Because I work on different environments with different configurations (Windows 2008, Windows 2003, SQL 2005 and 2008, etc.), it is not an option to reinstall my machine every time.
But the annoying thing is always the limited performance of them. You need to wait a lot as it runs slower than a normal physical machine.
A colleague of me found a little hack to speed up a Microsoft Virtual PC. By adding a line to the configuration of VPC it will use get a bit more processing power, thus running a bit faster.
Check out the article below:
SharePoint 2007 development: Performance issues with Virtual PC on laptops