I use a mac air (11") and run multiple linux VMs. Since I don't game the Linux in a VM is perfect. I use Parallels, VMware Fusion and VirtualBox depending on my mood, etc.
I also run Solaris, Windows and even OS X under virtualization and it's pretty nice.
I'm now installing Qemu (under os x) to try out FreeRTOS.
All in all it's a really nice development platform.
For Linux distros I've been using Ubuntu Server more and more (with a lightweight window manager). You don't say what you want to actually do with the system so I don't know which distro would fit best.
Ubuntu is a pain if you are trying to do anything Oracle (IMHO), I've found it best to just bite the bullet and use Oracle Linux in that case and use either vmware or virtualbox for the app.
lastly I recently setup a mac mini with ESXI (bare metal hypervisor), that thing is really cool (although you need another box to admin it).