Any ideas on the optimum memory settings for VMs running WinXP and 2003 Server? Right now I'm using 256Mb for each which seems to work ok, but would I see any better performance by allocating more RAM to the VMs?
That would somewhat depend on how much system memory you physically have right now. For me, allocating 256MB on my system (see sig for specs) works fine for WinXP SP2.
256M RAM for guest Windows XP is pretty enough from my expirience. Of course if you are going to use specific memory hungry applications like Oracle or CA Unicenter TNG - then adjust memory according to its needs.