Having spent the last couple of days grappling with different versions of PMVE & Windows Server (2003 & 2008), I can say that disk speed has been the biggest challenge. I think that the most important thing here isn't so much about the file format, but that you install Virtio disk drivers. At least that is what I found with 2003, and having spent the past 4 hours doing a 2008 installation it would appear although much faster on disk access, after attempting to expand a 180mb RAR archive on it, it got about 80% through and then stalled and went into "uber slow" mode. I can only assume that the disk IO is the problem here. I'm going to change out the drivers and see if there is a noticeable improvement with Virtio drivers, but I assume that there will be.
Myles