I have a physical machine which is runnning XP SP3 with about 3GB RAM, however am also running vmware based virtual machines on it, 4 in total, with 512MB allocated to each. I want to use the pc to do movie conversions as well, but knowing that the convertors usually use memory extensively, can I instead install an OS on another virtual machine to run on the same physical machine for doing the conversion? Will it impact on the performance of the physical machine or on the amount of RAM which I will allocate to that specific vm?

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You can't get something for nothing. If your virtual machine is honking back cpu cycles doing video conversion then there are fewer cycles left for other processes. If you limit the resources available to the virtual machine either by putting a ceiling on available memory or by lowering the priority you will make more resources available to other tasks but by doing so you will increase the time required to do the conversion. Also, the more tasks you have doing I/O the less efficient that I/O will be as you will have multiple processes doing seeks/reads/writes to different areas of the disk (assuming all I/O is to the same physical drive).

Not to mention that the actual VM executive takes CPU cycles as well.

Run video conversion tools natively, unless the OS you are using on the VM can run the conversion MUCH more efficiently than the equivalent tool on the host OS. I use ffmpeg on Linux to convert videos from one format to another. I always run them on the native OS, not in a virtual machine, but then my host OS is Linux, not Windows... :-)

Unless you are running the software in a VM in order to avoid having the software show up on an inventory (like on an office computer) in which case you shouldn't.

well thx for the replies, i tried it but it seemed now its both the vm and the conversion using the physical pcs resources to the max, will move to conversion on a physical pc itself in the end

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