Some of the Sharepoint environments at our customer are installed on Virtual Server 2005. After installation of Virtual Server 2005 the network connection of the host system was dropped when files were copied from the host system to the guest system. The only solution to get back up and running was a reboot of the host system (and therefore also the guest systems).To resolve this issue I ran into the following solution: http://support.microsoft.com/kb/888750/
The resolution involves adding a registry key which disables "Transmission Control Protocol (TCP) segmentation offloading".This functionality is not fully implemented in Virtual Server 2005, which causes the connection to be dropped. By disabling the functionality on the host system, the problems were gone.
I also found an update for Virtual server 2005 which is supposed to improve the performance. Especially with Windows Server 2003 SP1.
Microsoft Virtual Server 2005 Updated Additions: http://www.microsoft.com/downloads/details.aspx?FamilyID=a963433c-193b-41ac-af6e-ab7ab2db8541&DisplayLang=en
Overview of the Updated Additions: When you upgrade a guest operating system that is running under Microsoft Virtual Server 2005 to Microsoft Windows Server 2003 with Service Pack 1 (SP1), you may experience decreased performance in comparison with the original-release version of Windows Server 2003 as described here. This issue occurs because the Virtual Machine Additions included with Virtual Server 2005 does not have the performance optimizations that are required for Windows Server 2003 with SP1. Virtual Server 2005 was released many months before the release of Windows Server 2003 SP1.