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Frustrated with the sluggish performance of VMware Player and VMware Workstation on my Windows 7 machine, I recently turned to Oracle's free VirtualBox 4 virtual machine software and haven't looked back. After a few months with it, I find it considerably faster, if not quite as convenient.
VirtualBox's interface is much improved with version 4. Heretofore difficult-to-find options and settings are much easier to locate and use. Snapshots are also easier to manage. In the ten weeks I've been using it, it also seems far more stable. While version 3 worked most of the time, it would occasionally go belly-up for no apparent reason. Also, the mouse capture is much improved. You do not need to hit the right control key any longer to regain mouse control on the host (the PC on which you run VirtualBox).
Oracle continues to fix bugs in a timely fashion. The first version of VirtualBox 4 I tried in January 2011 would leave my USB Webcam running for no reason, and the main dialog where you launch and maintain your virtual machines would always cover the entire screen, no matter how many times I resized it. Both these bugs have been fixed.
Support for USB devices also seems improved in VirtualBox 4, though it's still not as broad as VMware's. The other thing I miss from VMware is the ability to drag files directly from and to a VM window. With VirtualBox, you must access files on the host machine via shared folders. It's not difficult once you're used to it, but it's not as convenient.
I'm now running Windows 7, Windows XP, and Ubuntu in VirtualBox VMs--and while I miss a few of VMware's features, the speed of VirtualBox is far more important to me. It also leaves a much lighter fingerprint on the host system. If you've experienced the same performance degradation with VMware under Windows 7, it's definitely worth a look. To heck with that--It's worth a look anyway.
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