I wrote a short blog post last year with some details about my vCampus development environment. I optimistically named it part 1, but never got around to part 2. The post needs some updating, but in short, I am now using Windows 2012 HyperV Core server and run several VM's. I recently put all of the VM's on a SSD and used disk de-duplication (which isn't officially support for HyperV server, but works very well) which allows everything to fit on one 256GB SSD. The performance has been very good, and it is flexible enough to allow me to test and develop pretty effectively.
One thing to note with VM's is that the PI license file is going to lock you to running the VM on one machine. If you move the VM to a new host, you will have to generate a new license file. Back in the old days, I had my development PI server in a VM and was able to load it to my laptop when I went on the road and then copy it back to my desktop, which was much faster, when I got back. Those days are over. I now SSH over RDP back into my development server when I am on the road, which I have been happy with.
Hope this helps.
Great question! I have several VM's running on a VMWare ESXi 5.1 host (am considering moving this to Windows 2012 HyperV Core). I'm also fortunate enough to have my own dedicated host I used to use local VM's with everything installed in a single server, but that has become a little unwieldy for me now.
My basic setup includes a DC, and separate SQL, PI/AF and SharePoint/web servers. This works pretty well for me, and allows me to work with the type of distributed architecture I'm likely to find at many of my clients sites. If I'm offsite and need access to my development environment, VPN access back to the office meets my needs fairly well.
Using AD in my PI dev environment is a must, as it makes things simpler especially using SharePoint (supposedly), and most of my clients are running PI in an AD environment.