Recently I have purchased a notebook that came with Windows Home Basic (that don't have with ASP.Net/IIS. I thought in upgrade the Windows version to one with ASP.Net/IIS, but I thought in another possibility:
I have an Hard Disk Case with a 360Gb HD. I thought in create a virtual machine with Windows Ultimate (installing too ASP.Net, IIS and Visual Studio 2008) in this HD Case, then I can access my "development environment" in any computer that I will work on (my desktop machine and my notebook).
But I was worried about the performance. I don't have experience working in virtual machines (I use it just to quick compatibility tests).
Are you using virtual machine as your primary development environment? What your finds?
Edit
Thanks for your answers! It really did help me!
I would like to know too about portability i.e., will the virtual machine that I created in my laptop work in the desktop? Will I need to re-activate Windows?
Working with a virtual machine is fine as long as you have enough RAM for both operating systems.
You should also be aware that virtual machines have some limitations e.g. when it comes to supporting graphic cards, so you'll want to make sure that whatever you are developing does not depend on a feature that is not available on your virtual machine.