Building a Dedicated VMware Machine for Testing

I am an independent contractor and as part of my work setup I am currently using VMware Workstation to isolate test configurations and software installs between several customers. Currently I am running this on a Windows XP laptop with 3Gb of memory. My general workflow is

1. Fire up VMware when I need to do a test install
2. Clone a pre-existing base model Guest VM
3. Give it the latest updates
4. Install the test software
5. Test it on and off over the course of a project
6. Put it away for later reference

However I have decided that I want to offload this task to a separate desktop machine that will sit in my office with me. So I have a blank piece of paper on which to design a practical VMware machine that meets my requirements (both hardware and software):

Case: I want to keep the case a physically small as possible and I like the idea of a shuttle style machine. I would also want to minimize noise as much as possible. I have no experience with liquid cooling but I am willing to give anything a go. I have also briefly toyed with the idea of a rack mount solution.

I see the case supporting an internal drive for the Host O/S and two other hard drives: One for storing the VM's and the second for backing up the VMs. I also see the backup drive being mounted in a removable caddy so I can easily slot in multiple backup drives for easy offsite storage. I can also see the VM drive being in a caddy as well (but not necessary).

Motherboard/CPU: I don't know if I should be going 2 or 4 core on the CPU, but it should be capable of supporting the Host and 2 or 3 Guest O/S at the same time in a usable manner. However I do know that I want something that supports more than 3Gb of RAM for the host O/S. I also need a scattering of USB ports, gigabit ethernet and good 2d graphics support. I don't do any 3d work and I am not interesting in playing 3d games.

Drives: Good solid (but not screaming) performance. I probably need 500+Gb for Guest VM storage and another 100+Gb for collected file storage. Host O/S probably needs 50-100Gb alone. I am not sure if any sort of RAID configuration is necessary (or if so the most suitable). I assume 3.5" over 2.5" . Also is Flash a viable competitor here?

Host O/S: I am not tied to any Host O/S*, but I do know that I will need to run both 32 and 64 bit guest OS's. The Host O/S will also act as a file share for various documents etc associated with the guest VMs. ( * But I can't spring for a Mac Pro running OS X)

VMware product I only have experience with VMware workstation on my laptop. I don't know if another VMware product would better suit my needs. Or even another competitors product 😉 However I would like to be able to sling the odd Guest VM onto my current laptop and run it from there.

So who wants to help me design my server!

Edit

Budget Oops I left that off the initial question. I'd say up to US$1200 would be a reasonable one. But I want to try and keep it below $1000.