I recently setup a Windows 7 beta VM. I used VMWare Workstation v5.58 and installed onto a pre-allocated 16 GB partition. For a beta, it works pretty well. I'm able to run EUO, SUO, UO without any problem. UO performance is pretty snappy, however it's not nearly as fast as a WinXP or Win2003 installation. There's definite window drawing lag due to the obvious code bloat of the newer OS. But UO screen redraws are genuinely as fast as the older OSes.
I might try and get a VirtualBox VM up and running. My guess is that you can't install this in a partition less than 16 GB. Older OSes were easily able to live with 8GB, and I could even get a usable VM installed into Win2000 with only 4GB (including UO).
Overall, it works ok but I won't be running out to buy Windows 7 until I can upgrade my hardware. I'm still running with my old AMD Athlon X2-4.4GHz.