Ny virtual machine which works on a PPC Mac running 10.4

As I use it on regular basis I can say it's good performance of using Bootcamp installed windows via VMWare Fusion 3.

Here is process I followed.

1. Make a bootcamp partition using Bootcamp Assistant for the space.
2. Install the Windows XP version.
3. Open the VMware and select the bootcamp partition, when you create a new virtual machine for Windows.
4. VMWare installs few utilities on the bootcamp partition, to use it to boot via Fusion.
5. Once all this is done, you can launch this windows version like a normal virtual machine in Fusion.

If I want a lite usage of windows I will boot via Fusion, if I want to run heavy programs then I will boot into Bootcamp, but I rarely does it, as Fusion VM is 99% OK for me for all activities including development with Eclipse.

In bridged mode, the VM's port gets its own Ethernet MAC address. If VMNet acts like a switch, you might not see packets destined for the Mac's network node, which I assume is the point of this exercise.

Yes, the virtual port needs it's own IP address as well.

Internet sharing just passes along traffic not destined for the machine that is sharing. It is not a network bridge (it runs as a NAT IIRC), so it won't pass along broadcasts either.