Ok, it's been a while coz I've been up the walls this last while, but I've got my iSCSI Storage Server running, with slightly mixed results.
I used FreeNAS to set up a storage server with 2 x 160GB HDD in RAID 1 and a 250GB disk as a standalone disk.
I planned to use the RAIDed disks as a LUN for my VMware ESXi host and the other disk for backups from my laptop (Win7 Pro). The using the disk for backups from my laptop worked a dream, but when I tried to use that at the same time as booting a VM stored on the LUN, I got problems. The VM would not boot properly, and while it was booting, I lost access to the iSCSI disk from my laptop.
I'm not sure if the problem is with the bandwidth, as I was using a single Gigabit NIC on the storage server, but I've got a hold of another Gigabit NIC to put into the server to see if this helps.
The experience has taught me a lot though, especially about how iSCSI works and how it can be an effective, lower-cost solution for SAN storage.
Now, if only I could get it to work as I want it to..........
Watch this space.