Depends on the power of the machine.
I use virtualisation quite extensively, and it’s surprising what you can get away with (acceptable performance level).
For example : one virtualisation host (here at work) is only a dual-CPU 2.8 Xeon (from 2006…ish… so 1MB L2 cache… and vastly underpowered by todays CPUs) with 6GB RAM and 2 x 1TB drives mirrored.
It has 8 Win XPs on top of it (doing various things) with more than acceptable performance.
On my desktop here (Intel Pentium D… 3.0GHz + 8GB RAM + 1TB disk), I am running OSX (2GB), XP (512MB), Win 7 (2GB) AND Server 2003 (2GB) all at the same time…
The host (physical PC) is Win 7 Pro x64.
Hardware these days IMHO is miles ahead of the software in terms of progression (OS in particular).