VPC and XP
Win98 and Win2000 both run very nicely on a dual 867 Mhz Power Mac. SiSandra estimates the processor speed to be equivalent to a 500+ Mhz Pentium. And it feels very responsive too - even plays mp3 files and some digital video using Windows Media Player or an MP3 player running inside Windows 98 inside VPC. Realistically, it is NOT a 500 Mhz equivalent - but it certain runs the same as Win98 on a several hundred Mhz Pentium which was, in fact, the standard configuration around when Win98 came to market.
That said, Win XP or XP Pro are both very, very slow by comparison and I would not recommend either choice for now. Which is too bad since Microsoft no longer sells Windows 98.
I have also run Linux inside VPC with decent results.
Like the VPC documentation says, a key factor in VPC performance is the presence and amount of L3 cache available on the PowerPC. When I run VPC on a nearly equivalent PowerBook having only L2 cache and no L3 cache, performance is noticeably slower.
Another factor is available system RAM. Basically, the more RAM you can allocate to the VPC Windows OS, the better your performance. While Microsoft says you can run XP in 128 MBytes, performance is terrible, even on Pentium 4 hardware. 256 MB is much bettter, and 512 MB is just about right. I my PowerMac I have 512 MB of RAM and can allocate up to 352 MB of RAM to the VPC virtual OSes and that makes a big perf boost (I will also soon add more RAM to my Power Mac and will test how much larger I can go with the VPC memory allocation).
Ed