Webhosting In A VMware Viable

I have a mid end Windows 2003 server that I use to host a game. I've been pondering on setting up VMware with a Linux VM and host my sites on it, and possibly other people's site. (start it as a mini private web host if my sites go well).

Just wondering if anyone has done this before and whether or not it sounds like it would work or not. I'm basically trying to downsize as I'm living at home and saving up for a house. I'm paying 20/mo on webhosting so figured if I move my websites and possibly resell a bit of space I could try make up for my server cost. If it worked out then I'd probably get another server to seperate it.

My biggest concern is how to backup my webhost if I sell that service, but I'd worry about it at that point. For now I'd do only my own sites. I'm estimating around 300-400k page views per month. Nothing super huge but still decent amount of traffic.