I can't decide if I'm being foolish or not, so help me out!

We're using VMware Server (the free version, 2.0.1). We are quite unhappy
with the performance of our Netware virtual machines. I am going to move my
domain/PO (200Gb) to a SUSE linux box. From our testing, we think the
following setup will give us the best performance we can expect for the
money we've spent:

Backend is a Promise vtrack M300i SAN enclosure (iSCSI).
CentOS (5.1 I think) linux machine boots directly to the SAN (no internal
hard drives).
Keep all GroupWise data directly on the VMware server host machine. NFS
share that data structure with the virtual machine using host-only
SUSE virtual machine accesses the GW data via host-only networking.

Am I crazy? The host-only networking access via NFS seems to perform quite
a bit better than virtual disks.