I agree wholeheartedly...
I use VMware for testing software, production environments and new installations.
When a test environment has been verified as working, it is (typically) a case of just zip'ing the VMware virtual disk, which will often fit on a standard CD-ROM (transport media and backup in one).
Then the content of the CD-ROM is un zipped onto the production platform, and within a minute or 2, it is possible to close one running platform down, rename two directories, and booting up the new plartform (if there's a hickup - God forbid - you can switch back within a couple of minutes, and continue as if nothing happened).
The method also enables you to configure systems based on different operating systems (various Linux distributions/versions, various Windows ditto), and switching from one environment to the other, when things are working (and even back again, if this is required).
Typically I use a Windows 2000 Professional as host (driver support is far, far better, than Linux), but the "virtual hardware" seen from the guest system, makes it posible to get the best of many worlds, and mix and match as needed (without the hazzle of reinstalling any drivers).
SME-server is a nice little system, that is easy to deploy - a ZIP'ed copy of a working, basic and "fully blade'd" server is approx. 140-150GB before adding a specific user environment.
Regards