We're running the final production bits for Ubuntu 10.04 Linux in a VirtualBox virtual machine with 1GB of memory on a Windows 7 host with 4GB of RAM on the hardware. Deliciously zippy and stable.
We advise setting stepping the default font size for OS down to 8 from its default of 10 to get much more efficient use of screen real estate. It's easy to do this using System -> Appearance -> Fonts.
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