Sounds like a great solution -- once you're into iSCSI, AD is out of the picture (and more importantly, AD compatibility is out of the picture). For VMware and iSCSI, you could either use the iSCSI LUN to provide a spot for your VMFS datastore or as an RDM directly to the Windows VM.
Similarly, you could use NFS from a StoreVault to provide storage to a VMware ESX server that served up Windows VMs in an AD 2008 domain.