I use VMWare server/Virtualbox. Virtualbox would be best for you as it's least intrusive on the host OS. VMwareServer2.x isntalls that i've tried install Tomcat webserver for remote management instead of VMware console which older versions used. This could impact your server. It also requires a reboot iirc. Virtualbox does none of this, you can run VMs headless and manage using RDP to specified ports. This takes a lot of load off the host as it's not rendering a display.
I'd also recommend installing an XP VM aswell if you have the resources. This way you can use an internal network for testing. This is a virtual network only the VMs talk to and thus any services etc you install cannot adversely affect the live network.
This is all dependant on what the 2003 box is running. This will consume CPU time and memory considerably. If possible I'd run it on another box. Both are cross platform so you could take a resonable spec PC, install a lightweight Linux OS on it as host then run the VMs on there. I usually use Ubuntu, either server or workstation version with the GUI shut down. XP uses lots of juice and you'll probably find running headless linux allows you enough to run an additional VM that'd grind an XP host to a halt.
