I will never understand why some people swear so much by virtualization, they completely ignore all issues that come with it to push it further. Yes, virtualization can be easier and more convenient at times. But that doesn't negate the issues of software needing bare metal to properly do its thing, or run at acceptable speeds, which virtualization on consumer scale will not get you to.
VMWare is running pretty much all the time on my MBP, although I don't always have a VM booted and running since I don't want to take the resource and battery hit from it unless needed.
In any case, I have a handful of VMs including Windows XP, Windows 7, and SL Server. SL serves for the occasional PPC program just to check things out until I can get in front of a PPC computer or something running SL. Windows is for running...well...Windows native programs. Most of those are not very resource intensive. Often it's older games, which is fine with limited GPU resources in virtualization, or scientific instrument software that I use for off-line data processing. In the latter case, I could actually run SOME newer stuff directly since it connects via ethernet or USB, but I prefer to have dedicated data acquisition stations.
The situation isn't the same with Classic, where you're often doing stuff that's somewhat resource intensive, and a G3 or single G4 under OS X doesn't have a lot of headroom to give. Virtualization drags the whole computer down. Even lower spec dual G4s fall victim. The only computer where I've used Classic to any great extent is a G5 Quad, where you have lots of CPU overhead, plenty of memory to give up, and no route to run OS 9 natively. I've also run Microsoft VPC on that, which is a much less than satisfactory experiment.
As a side note, though, the Quad and pretty much all NWR Macs have caught me with one particular program that requires an ADB HASP. I need to get that set up on my 1ghz B&W G3, since it can be a bit of a pig of a program(Spartan, a computational chemistry program) and that's the newest computer that actually has an ADB port. The 1ghz G3 is sort of ideal(short of a 1.1ghz G3) since the program can't use Altivec and the fast Sonnet G4s require you to drop the FSB down to 66mhz even in a B&W.