I just saw this link on the Virtual PC Guy blog on how to use a Windows Server 2008 file server to store the VHD’s of your file server. Crazy but true!
In fairness, 10GB networks, dedicated NIC’s, NIC TOE and Windows Server 2008.
Credit: Jose Barreto.
EDIT:
This is in the Hyper-V release notes:
"You may encounter issues when attempting to attach virtual hard disks (VHDs) and ISOs to a virtual machine from a network share. To avoid this issue, ensure that both the Hyper-V server and the network server are members of the same domain. The network share requires read access for ISOs and read/write access for VHDs for both the user and computer account of the server running Hyper-V. If you are attempting this from a third computer (not utilizing the user interface on the server running Hyper-V), constrained delegation for Server Message Block (SMB) between the server running Hyper-V and the network file server must be enabled".