This is now history and my setup consists of one of the above machines headless tucked at the side of a set of drawers running xp and vmware with backtrack 2,3 and 4 and de-ice etc all in one box. I connect to this via remote desktop (MSTSC) from my laptop and it saves my laptop being flat out in the processor dept. I'm going to try server 2003 as the guest OS to see how it fairs in terms of stability and usage as i've had the odd freeze but generally it works well.
So i've saved some room, some power and if i hadn't already had the kit i would have saved on the initial outlay aswell as there is no need for kvm's etc
I definatly think vm is the way to go another advantage is you can create a state for each os when all was well or at various stages and then just revert which is obviously very useful in a pentesting enviroment.