I used to run an Active Directory domain on my home network, but have since migrated back to a plain old Workgroup. However, since my job is in .NET software development, I'd like to be able to work with some Windows based server technology, which means running a domain (technically you don't **have** to, but for all intents and purposes, you do).

I kind of like not having a ton of old computers lying around jacking up my power bill, so I'm hesitant to build/buy more hardware. Enter Virtualization. I currently run a bunch of VM's for various things, but spinning up more than a couple at a time really starts to bog the system down, especially if they run a server OS.

It could just be that I simply need more memory (at 4GB right now), or would something else be of better use? I'm running VMware Workstation. I'd need to run the domain controller (Win 2008), a SQL Server (2008), TFS (2008), maybe SharePoint (2007), and an XP client or two, though not necessarily all at once.

Would I see better performance running a server based VM (like whatever VMware's version of Virtual Server is)? I'd prefer to keep it on my workstation, but would it be better suited to build a separate server to host all the VM's?