There a lot of determining factors that go into the performance feeling here.
One tweak you might consider is setting up Jumbo Frames. Scott Lowe has a recent blog post here that shows some of what he did to achieve this.
You mention that the guests will be running low CPU load - those are always great candidates for virtualization - but the difference between FiberChannel and iSCSI doesn't really come into play yet.
If your vm guests are going to be running storage-intensive operations, then you have to consider that the speed of transferring a read/write operation from the VM Host to the storage array may become your bottleneck.
Since your typical iSCSI transfer rate is 1Gbps (over Ethernet), and FC is usually around 2-4Gbps (depending on how much cash you're willing to spend), then you could state that the transfer speed of FC is roughly twice as fast.
There's also the new 10Gig-E switches, but your Powervault and Powerconnect don't support that yet.
However, that doesn't really mean that the machines will work faster, as if they are running applications with low I/O, they might actually perform at the same speeds.
The debate as to which is better is never ending, and it basically will depend on your own evaluation and results.
We have multiple deployments of FC-based mini-clouds and iSCSI-based mini-clouds, and they both work pretty well. We're finding that the bottleneck is at the storage array level, not iSCSI traffic over 1Gb Ethernet.
I'm no expert on equallogic, but Dell's md3000i might cover all your needs:
15 drives in the basic setup, and you can expand it with up to 2 (or maybe even 3, can't remember) MD1000 boxes, 15 drives in each.
The boxes are well supported on ESX or any other hypervisor you might choose
Best Answer
There are only a limited number of drives that are certified - non certified drives wont be recognized by the array and will not work even if they are otherwise identical to the drives already in the array. For SATA drives you will also need an interposer that allows the MD3000i controller to interface with the SATA drives. If you can precisely match the drive type and firmware revision then the array will definitely recognize the drives but you may have trouble with support later if they see that the array configuration does not match their records.
I've never tried it though and its not the sort of thing to just take a chance on. As David Collantes says you should get Dell to confirm whether they will support this or not and I'd add that if they say it's OK then get that in writing . I would be surprised if they do but they might be flexible given the entry level nature of the MD3Ki, what I can say for certain is that they do not support non-Dell supplied drives on their Equallogic range.