Are you using virtual machine as your primary development environment?
Recently I have purchased a notebook that came with Windows Home Basic (that don't have with ASP.Net/IIS. I thought in upgrade the Windows version to one with ASP.Net/IIS, but I thought in another possibility:
I have an Hard Disk Case with a 360Gb HD. I thought in create a virtual machine with Windows Ultimate (installing too ASP.Net, IIS and Visual Studio 2008) in this HD Case, then I can access my "development environment" in any computer that I will work on (my desktop machine and my notebook).
But I was worried about the performance. I don't have experience working in virtual machines (I use it just to quick compatibility tests).
Are you using virtual machine as your primary development environment? What your finds?
Edit
Thanks for your answers! It really did help me!
I would like to know too about portability i.e., will the virtual machine that I created in my laptop work in the desktop? Will I need to re-activate Windows?
Answer
I use VMWare and Microsoft VPC-based VMs quite a lot, hosted in a Quad 6600-based XP Pro box.
My use of VMs was initially to test in different environments, and for debugging I've had to install SQL Server and VS2008 in one or two of them.
For those purposes, VMs are very convenient.
But based on that experience, I wouldn't make a VM my primary dev environment, simply for performance reasons. VM performance is surprisingly good, but the difference (for pretty much everything), although not huge, is enough to notice.
When I'm compiling dozens of times a day, running big queries, etc, etc, I don't want my dev machine to be any slower than it absolutely has to be.