virtual machines depend on the resources you have in your system
the virtual machine can take part of your ram, space on your hard disk, it doesn't use the hard disk, just creates a file that contains the virtual hard drive and core(s) from your cpu
the system will loose speed depending on what hardware you have and the apps/desktop you use in the virtual machine and in your linux desktop
in my case with a 1600 mhz cpu and 1 gb of ram, running vista or xp in a virtual machine keeps the system busy so web surf or 3d desktop effects under pclinux is slow but usable
to run virtual machines ideally you should have at least 2 cores cpu(1 core for virtual machine and the other for linux), 2 gbs of ram and a good video card(not integrated one, eats resources/ram) but you can run a virtual machine with as low as 512 of ram(leave 256 for linux), a 1500 mhz cpu and a 10 gbs free on your hard disk
remember that a virtual machine doesn't have access to your real hardware, it just runs a app that manages some resources from your system and imitates a pc so you won't have full access to the video card, sound card, usb ports(virtualbox free version can't use usb ports) and other similar resources(tv card, printers, scanners and others give problems/doesn't work)
to play some games it is ok(basic 2d or 3d), advanced games like call of duty modern warfare 2 you could have better luck with wine because the virtual machine doesn't have complete access to video card capabilities so performance can be very low compared to a full xp/vista/win 7 machine running as slow as a third part of the possible maximum speed
this is not a limitation of linux, it is the current state of virtual machines in general
