A couple of configurations that I have found to be useful when using VM Server.
For the un-initiated or new comers to virtualization. This is where many of us got started or will get started. Because it's cheap, runs on top of an existing Windows machine and is portable. I take VM Server with me on my laptop and us it to run Specialized appliances such as Nessus, Network Tools and other devices that are specialized for discovering and documenting Enterprise Systems.
I have used VM Server in many organizations as a an example as a test environment for admigration, Sand Box for developers that require instant rollback to a previous configuration (snap shots).
I have several business that were budget constrained. And used VM Server to deploy / redeploy services such as exchange file and print services etc. (be careful with these they bite)
One thing to consider. With the release of vm4i as a free host os you should consider this platform if you have a server that can be committed to the purpose.
The problem that we run into is that we are operating multiple machines using a Host OS that is already plenty heavy.
So follow the enclosed recommendation's and you should see more performance.
some things that I do that seem to work
1. Kill the antivirus or set exceptions for all of the vm components and the swap file.
2. Create and consolidate the page file.
You can get a page file optimization tool here. http://technet.microsoft.com/en-us/sysinternals/bb897426.aspx
3. Defrag the hard disk prior to placing the vm's on it.
4. Don't run the VM's on the same hard drive as the OS, VM Server or the pagefile.
I also recommend as much RAM as you can afford. Consider 4gb to be a minimum.
If you plan to go production with vm server I recommend using an ISCSI raid array.
EqualLogic is an excellent choice or if budget is an issue Openfiler.
I have many customers that run successfully in this configuration. Exchange SQL DC's etc.
Obviously with the AV disabled the base server will need to be isolated. Run AV on the Guests.
Hope this Helps