Are you using SQL Server inside a VM? I do this all the time. It's supported for Microsoft's VM offerings, and I've found the benfits to be huge.
For instance - I run all of my test machines this way. With the new "Hyper-V" in Windows Server 2008, you can "freeze" at certain point and then fall back to that point in an instant. VMWare has this too.
I highly recommend you at least put your testing systems on Virtual Machines. If you need more info on virtualization technology, check out this reference on VMWare.
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