As a comparison I got close to 100MB/s when using NFS from the storage to the boxes running Virtualbox (VBox is running on X4450s with 64GB RAM, all NICs aggregated). So there was hope. Next I tried Solaris' ISCSI initiator and got transfer rates around 60MB/s. Both way better than the VBox' own ISCSI initiator in combination with whatever W7 does.
Digging around a little I found this blog post. So it seems like Windows tries to flush the cache pretty often. First thing I tried was to enable fast ack for incoming wirtes to the ISCSI target(s) with
iscsitadm modifiy admin -f enable
Luckily the server is backed by UPS power so I chose to ignore the warning that this might be dangerous. (Anyway there a no data on the client images, so worst case I can just clone the guest again if it goes wrong ;-))
Next thing I set the MaxRecvDataSegmentLength to 128MB, that should give the clients a bit more memory to dump their stuff faster:
iscsitadm modifiy target -m 128M
That made things a little better. I got nearly twice the throughput. Still way too slow.
So as a last resort I remember this post by Robert Milkowski about enabling write cache for zvols. As the X4540 is running Solaris 10 the Comstar option to ignore cache flushes doesn't exist yet (or more precise no comstar in Sol10). So mileks program to enable the write cache on zvols does help a lot.
I now get about 30MB/s for the W7 guest, which I consider decent enough for a virtual Windooze box ;-)
For all above always keep in mind, if you loose power, you may loose data.