As a proof-of-concept for USC computer science labs,I set up eight Windows 7 VMs on the same physical host in the Windows Server demonstration below,and recorded firing them up simultaneously and doing some light web browsing,etc. on several of them. Performance is pretty solid;you could probably cram double this many guests on that host and still have as good or better performance than the typical physical lab workstation.
update:replaced video with somewhat more watchable version,with all eight guests tiled on one screen.
Aside from good performance and a single box to maintain,this setup offers some fairly compelling advantages over the traditional computer lab:the host also has a 2TB conventional drive in it,which is where a “gold”image of the Win7 guests is maintained. It only takes about 10 minutes total to reset all of the guests to the “gold”standard;and it would be just as easy to keep multiple gold images on the conventional drive for different classes –Linux images for one class,Windows images with Office for a basic class,Windows images with Visual Studio for another,Solaris for yet another…you get the idea.
Also,the time to “reset”the guests could be substantially faster than that,even,with a little tweaking –using .qcow files instead of whole LVM volumes would allow you to use rsync with the –inplace argument and only have to write over the (relatively few) changed blocks,for example;or in a more advanced layout a separate FreeBSD machine with a large RAIDZ array and iSCSI exports could be used to store the images. There’s still plenty of room for improvement and innovation,but even the simple proof-of-concept (which I put together in roughly half an hour) looks pretty compelling to me.