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SBS 2003 Virtual Server Replacement for Terminal Services

I have a small business (5 users) using an SBS 2003 R2 server. Remote access to the network is provided through Remote Web Workspace. I have one notebook user that occassionally needs to connect remotely, but his notebook is not in the office or with him, i.e. he has no machine to connect to in the office. All other clients are also notebooks.
Terminal Services in application mode seems like overkill in this situation.

My thought:
- install Virtual Server on the SBS2003 box
- install Windows XP as a virtual machine, join it to the domain, configure the user account, outlook, etc
- the user can then remote web workspace  in, connect to the virtual machine and access documents, email and office apps

Is this completely insane?
What spec server would I require?
Is there a better way?
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Rob Williams
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Perfect. Just what I was looking for. Thanks.
Thanks mikefish. Good luck with it.

ps- "make sure you have at least %12" above should read: make sure you have at least 512 MB more than you need for SBS