Thanks for all the replies.
We have an iSCSI SAN on dedicated switches (two storage controllers, each with two ports, one on each of two separate gigabit switches) and ESXi on two fairly capable hosts (24GB, 2 x quad 2.66GHz, 8 NICs) so should be able to give the VM decent bandwidth and plenty of RAM. All is running very well for our other servers and I will now have a trial run at virtualising SIMS .net (with full SQL/not express) with the data on the SAN.
Will report back when I have either been crowned SIMS .net saviour or sacked for dragging us back into the dark ages.