Snapshots are available with VMware Workstation, VMware Fusion, VMware Server and ESX/ESXi.
Windows has a feature called system restore. The idea behind System Restore is to revert to a point in history in case something goes wrong – i.e.: patch Tuesday. It’s an undo feature for your Windows OS. There is overhead for this undo feature, especially on the IO front which is generally acceptable for a dedicated desktop but not ideal for VMs.
One can approximate the function of System Restore with snapshots. Snapshots should be used only when modifying a VM, i.e. patch Tuesday, new software, etc… The idea is “I know I’m making a change so I snapshot the VM”, I execute the change, and test. Once testing reveals no issues and everything works as expected, the snapshot is removed. (Of course this is now a manual process instead of an auto magic one so it’s a compromise)
Snapshots should not be persistent! They should only have a life of a few hours to a few days. It is important to remove the snapshots since it creates a delta VMDK file and can grow quite large. Also, if one creates many snapshots this can affect performance of the guest.
Personally I usually snapshot when the guest is powered down – this gives me the cleanest possible snapshot and I can revert to it with confidence. It also means the snapshot is created instantly since the file system does not need to be quiesced. Additionally, it is important to remember your VMware hypervisor can quiesce the file system (so long as VMware tools installed) but not necessarily the applications running in Windows. i.e.: SQL cannot be snapshotted reliably.
It is also very important to remember Snapshots are not backups in anyway shape or form. For “backup” purposes the entire VM package should be copied and compressed and stored on a medium other that the host running the VM. i.e.: I store my VM archives on my DIY NAS.
Disabling System Restore in XP: Right-Click My Computer and select properties and click the system restore tab, Select “Turn off System Restore” and click OK.
Disabling System Restore in Windows 7: Right-Click My Computer and select properties, click the System Protection link, Click the Configure Button and select “Turn off system Protection”, OK, OK
In conclusion, one can use snapshots in lieu of system restore to gain some performance in the Windows guest but it’s a compromise since the taking and deleting of snapshots is a manual process.