I've spent some time over the past week playing with both Virtual PC and VMWare Workstation.  I've been wanting to try out some of the beta developer bits from MS (WinFX, Atlas, etc.) but didn't want to deal with having those pieces on my main development machines.  So, VPC and VMW to the rescue.

I've used both of these products in the past and never really found much difference between them.  Apparently I hadn't looked at the latest version of VMWare (5.5) which pretty much destroys VPC in the realm of performance.

I have created a base XP install in both VPC and VMWare, and the VMWare VM gets to the logon screen in about 10 seconds, while the VPC machine takes about 20-30.  While I didn't time it, installing Visual Studio 2005 on VMWare was noticeably faster.

Both VPC and VMWare offer similar offerings in terms of differencing disks/snapshots, but VMWare gives you a spiffy tree-like view of the paths you took to create your snapshots and allows you to easily back out to a specific snapshot at any time.

My only beef with VMWare so far is that there's a known bug that the latest released Vista build, 5342, won't install.  It installs and works great in VPC (and as a native dual boot on my machine), but no go in VMware.

So what's the deal, Microsoft?  Sure, you bought VPC from Connectix, but you created Windows.  If anyone should have a speedy virtualization product under that OS, it should be you.  Hopefully the next version of VPC will attempt to rectify the huge performance difference between the two....