ahh I seeVMware allows you to set how much of your memory it can use. I currently have it set to 2GB, so you can see why I get some lag. The actual things that I use in VMware aren't memory intensive (AS/400 emulation/Telnet), it's just that it has so little RAM to work with.
Like you said, $700 is a great price. I'm leaning towards grabbing it just because of that. If I don't like it, I'm sure I can sell it and make my money back and then some.