VMWare various disk type advantages/disadvantages

0 : single growable virtual disk

The default most people choose. Does not chew up as much space unless it needs to but performs less well than a fixed size vdisk file. Growable vdisks allow you to "oversell" your physical drive space.

1 : growable virtual disk split in 2GB files

The only real difference is that these vdisks can be used on filesystems that have trouble with files larger than 2Gb (or 4Gb in the case of FAT32). If you always use NTFS, ext2/3, or something else modern this is not an issue (thigh be careful of extra limitations that might be apparent with options like file level compression, see here for technical discussion on such things with NTFS). May also make a difference to your backup procedures.

2 : preallocated virtual disk

Disadvantages (over option 0): takes all the space it needs immediately and for as long as it exists, and takes longer to create.

Advantages: you know the VM is never going to fall over because it can't grow the vdisk file later because the host filesystem is full and performance is better on average as there isn't the extra overhead of managing the files that host the disk (gowning them when needed, maintaining an index of which virtual blocks are where in the physical file, and needing to use that index when reading a block). Also less prone to fragmentation in the host filesystem as it will only fragment at creation time.

3 : preallocated virtual disk split in 2GB files

Just the portability difference, as with 1.

4 : preallocated ESX-type virtual disk
5 : compressed disk optimized for streaming

Unsure - I've not seen these options (or if I have, I've not paid attention to them!).

On host filesystem formats:

With growable disks there will be a small but measurable write performance drop if you use a filesystem that performs meta-data journalling (NTFS, ext3/4 with default options).

With both (growable and fixed) there will be a larger write performance difference if the host fs does full journalling (ext3/4 with certain options, and a number of other filesystems (again, usually not by default)).

FAT32 is likely to fragment badly with growable disks, more intelligent filesystems (ext2/3/4, NTFS, and anything else modern) will have far less hassle in this regard.

If you use fixed vdiscs then something like ext2 (or ext3 with journalling fully off) will perform better than something that does journal. There are some caveats depending on your write patterns here though: you might not notice the difference at all and there are some (probably rare) write patterns where a full journal could actually boost performance (due to write reordering caused by the full journalling process reducing disk head movements).

Your choice of filesystem in the VM will interact with the choice on the host. If you set both to full journal then every block written in the VM can potentially become four physical block writes, more if you are using growable disks.