iSCSI only applies if you are using a SAN. Local storage will be SAS or SATA. With iSCSI you can use multipathing to achieve greater than 1gbps throughput but TBH I put in 4x 1gbps multipathing and can hardly go over 100MBps disk speed to a single SAN. Probably because I'm using SATA in a big RAID6 but for me the IOPS is more important so got SSD caching for that :)
You can also use SAS to connect hosts to SANs but tbh I prefer ethernet as the SAS HBAs are quite expensive and not scalable like iSCSI.
Thanks for all your feedback. Having looked at Hyper-V 2012 and watched a few youtube demos, it does look pretty good, especially the live-migrations and shared-nothing live migration. Considering we are a fairly simple Windows setup (6x 2003 Srv and 2 x 2008 Srv), the no cost Hyper-V 2012 may be the way to go. As I'm new to all this I haven't bought into everyone pushing me to VMware simply 'because its better and everyone uses it'.
I will continue my research but this certainly is looking more cost effective and suits our simple setup well.