Scaling back desktop Linux's footprint for better performance, other apps

One question I've never been able to get a really good answer on (maybe someone knows the answer), is how to build the perfect virtualized system. Whereas certain virtualization solutions (VMware, Virtual PC, etc.) allow for a configuration where Windows XP or Windows Vista can be the host operating system (the one that runs on the bare metal of your PC) that supports the guests (the virtual machines), I have a pretty good hunch that running Windows as you host is overkill if that host isn't going to do much else other than be a host to your guests.

In other words, if you're like me and you desire to run all of your software on guest VMs (making your OS configs infinitely easier to backup and more portable to other systems), you're not going to want your host OS hogging a bunch of system resources just to run all of the standard stuff that loads when most of those resources won't be needed to run your virtual machines anyway. One advantage of Linux over Windows is that you can break Linux down to the kernel and just those components you need to get whatever job done you need to get done (eg: run virtual machines).

In doing this, you can free-up system resources that are normally consumed by the host (even drive space) and you can make more room for your VMs. One result is that you can speed up a slow VM by allocating more memory to it. Or, maybe you can run more VMs simultaneously without sacrificing as much performance as you might otherwise would have had to do. 

Makes sense, right? Unfortunately, I'm not expert enough in Linux to intuitively know how to do this nor do I have the time to tinker. Periodically, I look around to see if anyone else has figured out something like the the bare bones Red Hat configuration to run VMware as a host on an IBM Thinkpad but haven't been able to find something like that. Or, the step by step to do the same thing with Xen (even though Xen is primarily for servers, there's no reason you can't use it to host desktop operating systems too). Short of having that information at your fingertips, occasionally, an interest tip or series of tips pops up on the Net. One of those, if you're interested, is titled Reduce you Linux memory footprint and comes from IBM's Martyn Honeyford who gives a step-by-step on how to strip down a Linux installation. The story is not geared towards people like me looking to build a lean mean VM-running machine. For example, an article about that would tell you how to recompile the kernel to include exactly those things that a solution like VMware needs.  It also doesn't talk about where to find certain applications on the hard drive and get rid of them. But it's very good at delivering on its headline.