This is what we do. The biggest benefit here, for us, is that if a release goes horribly wrong, or our testers find a disastrous bug, we can easily roll back to a clean state and only lose the time it takes to load the VM.

I've tried using a VM for doing development, but I've run into the issues mentioned in the parent article: Visual Studio 2010 is memory and CPU hog. I've maxed out the RAM in my laptop, and it still ran too slowly to be really useful.