I recently compared the performance of virtual machines with the real hardware. The figures were suprisingly good.
Shortly after that, disaster struck. My laptop wouldn't turn on. It took Dell 2 weeks to fix, replacing the motherboard and the video card.
If I had delphi installed directly, I would have had 2 weeks of very limited productivity. As it was, I ripped the hard drive out, stuck it in a usb caddy and continued working on another machine. I was back up to speed the next day.
Edit: It didn't take a full day to get productive again, I did other work until it became apparent that it would be a while before my computer was fixed. It only took about 30 minutes to transfer the data over and get going.
If it had been a hard drive problem, I would have restored the latest vm backup off a dvd, pulled the latest changes from the version control or the source backup and been back up to speed with limited data loss.
I get a new laptop next month. Installing delphi is going to be as easy as installing vmware and copying the vm files over. 30 minutes work, most of which is surfing the internet waiting for the files to copy. The last time I actually had to install Delphi, it took hours.
There are other advantages as well, my development backups fit on a single dual layer dvd, I get to run and test on multiple OSs and disaster recovery plan is much shorter.
So make Delphi 2010 your starting point. Download Virtual Box, VMWare Workstation ($$$) or Virtual PC and use that for development. If you are running Windows 7, you could look into Windows XP Mode and use that.