VMware Server 2 performance issue

Good evening gentlemen!

I will try to make it short, clear and straight-foward.

I've installed VMware Server 2.0.0.122956 on 6 Host server running W2K3 Strd SP2 with the following hardware:

HP ML350G5

26GB RAM

Smart Array P400 controller with 256MB Write-cache

Drive C:\(System) and D:(Soft Data) on 2 x 72GB 10K RAID 1

Drive E:\(VM Guess) on 6 x 146GB 10K RAID 5

6 NIC

Then, I P2V with VMWare Converter around 70 servers accross all the host servers. There's W2k3 Domaine Controllers, SQL Servers, SQL cluster, Mail cluster, Web cluster and so on...

Every of my hosts server will welcome 12 guess servers (3 DC's and 9 SQL Servers). Exception for two of em, which will be used for clusters, SQL servers and central servers.

This is entend to be used as a LAB environment so the workflow to the servers wont be scary (SQL servers will be uses by around 10 users, same for the rest)

I P2V all the servers and set the virtual disks to be growable. I change this later by configuring the all disks to be preallocated to gain performance. I also expand most of them since I have wnought room for everyone. Ok, this was the info part... Now.... the problem part!

I succesfully installed all those beauty in each host server and start to make some performance test and get used to the thing since it's my first VM challenge yet.

I launch 2-3 VM at the time, waiting to the host to reach Windows prior to launch some more, everything seems to work great even if I found the VIC 2.5 interface a little laggy sometimes. All of my servers boot with no errors. After maybe 10 mins, the host server start to grind the disks. I opened Perfmon to have a look and I saw the Queue length reaching 220-240 for 1 hour, sometimes more. It then come back to normal and can start over again, randomly. I talked with DBA and no ressource cunsuming operation are to be perform by the SQL server at that moment. Remember that the SQL servers are not uses by any users at the moment but they do perform replication on each others. Not much data replicated.

Questions:

• Am I right thinking that with this hardware, I should be easily capable of hosting 12 Vm's according to the spec I mention? In fact, how many Vm's could I run into my servers according to your experience ( I know it depend on server roles and tasks... but gimme a number!!!! )

• How much of a bottleneck my RAID 5 over 6 disks can be in such architecture?  What are my solutions?

• Is there any tweak / tips / drivers / add-ons or anything else I could use that can help me gain/diagnose my performance problem?

If you want to share with me, I'll be pleased and thankfull! I will give any info needed on demand, please ask!

Later!

Luc