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The general rule of thumb is to host the VM on a separate drive than the host. Is this necessary with an SSD drive? I'm looking to get a 120gb SSD for my mbp to run Windows 7 VM's as well as OS X. Any other tips are appreciated.

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While not necessary per se, anything you can do to put the VM disk I/O on a different channel will make a big imptovement. Especially if the VM uses the disk a great deal. I would suggest a drive in the optical drive bay or a USB 3.0/eSATA external

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It's only an improvement if the host I/O load is already high. On most current SSDs, this isn't going to be the case, and there's plenty of IOPS to spare for a VM (or two, or more) without a significant slowdown in the host. – afrazier May 31 '11 at 16:39
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As you say, it is a rule of thumb. Why not run it as you'd like and if performance is an issue, make adjustments.

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SSds get their performance from a lot of internal parallelism. But in order to make use of it they need a relatively heavy IO load. On desktops most good SSDs are absolutely starved for IO load. Adding a VM will not hurt performance at all. At least not until you start moving enough data to saturate the SATA connection.

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