-- Ben Armstrong, Virtualization Program Manager
Talking about core virtualization at Microsoft (Hyper-V, Virtual PC and Virtual Server).
When you are running operating systems other than Windows NT / 2000 / XP / 2003 under Virtual PC you can gain a performance boost by enabling host side disk caching. This is not enabled by default as it is not architecturally correct behavior - but I have seen situations where it can result in a 25% speed improvement in disk I/O intensive applications.
You can enable host disk caching by starting Virtual PC with the '-usehostdiskcache'. This setting is then enabled globally on all virtual machines that you launch in that session.
Cheers,Ben