Linux – Easiest way to evaluate Varnish using virtualized linux guest on Windows XP host

You can get a pretty good measure of this using the iostat tool.

% iostat -dx /dev/sda 5

Device:         rrqm/s   wrqm/s     r/s     w/s   rsec/s   wsec/s avgrq-sz avgqu-sz   await  svctm  %util
sda               0.78    11.03    1.19    2.82    72.98   111.07    45.80     0.13   32.78   1.60   0.64

The disk utilisation is listed in the last column. This is defined as

Percentage of CPU time during which I/O requests were issued to the device (band-width utilization for the device). Device saturation occurs when this value is close to 100%.

The best distro for anything is the one with which you have the most experience configuring and administering. Beyond that, they're all pretty similar.

I'd say use something like Ubuntu server LTS release, or CentOS 5.4. Both good stable distributions, with good community support, and a regular release pattern.

You should probably look at a better virtualization solution than VirtualPC. If you're already using linux, then KVM is a pretty natural choice. As for RAM utilisation, think about how much you want for the base system (2-4G), then add how much you want for however many virtual machines you want (say, 4 VMs, 2G each => 8G additional RAM)

I've just re-read your question, and notice that you don't have any linux experience so far. In this case, you'll probably find Ubuntu the most easy to get started with, it has the most comprehensive forums, IRC Channels and HowTo pages. I've been using Ubuntu for a good number of years on desktops and servers and still find apt-get package management hard to beat.