I run Linux as my desktop OS at work, but there are some times when I need to use Windows. [...] However, I quickly discovered that performance was miserable with it.
I'm in the same situation, though at the moment, "sometimes" has been 90% of my time. I've been running a Windows 7 VM on a KUbuntu host, and haven't really noticed significant problems in terms of performance, but that may be due to my hardware specs (8Gb RAM, quad core i5 @ 2.67 GHz, software raided disks). Every now and then, I'll get some heavy disk i/o, but it's not frequent enough to seriously impact performance.
You might want to give VirtualBox a try. I gave it a whirl earlier, but went back to VMWare because that's what everyone else in the office was using, and there were already a number of virtual machines set up with it.
The thing that pisses me off most about the VMWare stuff is that it's killed both the alt-tabbing, and my MMB-copy/RMB-paste on the host.
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