Question : SBS 2008 Premium install , SQL part on VM

I have an upcoming upgrade of SBS 2008 primium. I plan on running the Domain controller/Exchange 2007 on one phisical server with RAID 5.  good/ bad?

For SQL 2008 I was planing on running it on a VMware server ESX server 3i  (Poweredge 2950 [8Gig Ram, 8 x 2.493 GHz] which is currently hosting VM Web server and VM File server).
The server right now uses less then 4Gig of ram and average 540 MHz of  CPU usage between the 2 vm's, and planty of disk space for another Datastore. I have 31 users total.
Does anyone see a reason not to run SQL 2008 on that same server with the other vm's?
I also want to intall Windows 2003 64bit on sql vm just in case I need more ram.
Any advice would be much appreciated.

Answer : SBS 2008 Premium install , SQL part on VM

We currently run 3 X Server 2008 Enterprise VMs on each of our two PE 2900s (The tower version, 2 X Quad Xeon 3GHz, 16GB Ram) with the following specs:

APP Server(SQL Cluster node1, DFS member, LOB Apps) :
    4 X vCPU
    4GB RAM
   
TS:
    4 X vCPU
    8GB RAM

Exchange:
    4 X vCpu
    4GB RAM

There is, i'll admit, a slight gamble with the CPUs as to the load on each VM at any one time but I think it illustrates the point that these 29xx series Poweredges can handle a fair load and I would expect yours to perform well under your proposed plan. I would go with a 4 X vCPU, 4GB Ram VM for the SQL machine provided you ensure good network connectivity (maybe allocate an NIC to that machine alone? - by the looks of your ram / cpu usage, your other VMs are not using that much resource wise so are probably not that busy so you could share an NIC between the two of them).  

As Mestha has pointed out, best practice would be to split the data from the app. This could be done as outlined above or, assuming your file server is using a RAID array in your PE 2950, you could use that to house your database although this method may not provide redundancy for your VM depending on where you store it (on RAID or not).