Virtual PC was out of the question initially because the memory required to run the alpha (over 1Gb) was twice the maximum RAM supported for guest OSes. Other options were considered, including buying a P4 desktop to replace the old mothballed P2 under my desk, and upgrading the RAM in my wife's desktop. After a lot of time on the Dell and Harris Technology sites I couldn't quite bring myself to shell out almost $2,000 for a PC with the required memory, and my wife's computer was too busy for an extra user (again due to my daughters, who can become very objectionable if they can't check out the latest on the Wiggles and Barbie sites at regular intervals).
The breakthrough was realising that at this stage all I really wanted to do was compile things with mxmlc and use the 8.5 player, which between them aren't anywhere near as much of a resource hog as the alpha FlexBuilder IDE (which I'm sure will be very svelt and nice by the time it ships). Perhaps VPC could cope if I wasn't running the IDE.
This was worth checking out. I installed the Flex framework on a W2K Server I run on Virtual PC 7.0.2. I used my current IDE (Eclipse with Oxygen and FDT) to whip up a test application and shared my working directory with the virtual machine. With 512Mb of RAM allocated to the virtual machine I found it took about 30-40 seconds for mxmlc to compile a basic app - about 10-20 seconds more than what PC users have been reporting running builds on real hardware. It was slow for someone used to Flex and mtasc compile times, but bearable.
Here's a screenshot from the virtual machine just after a build has completed. The memory got up to about 260Mb at it's peak:
