"You're pretty likely to come across apps that, for good reason or no, will be uninstallable or at least unsupported on the Server versions of Windows. Carbonite, Mozy, LiveMesh, Acronis's home products, all come to mind right off the bat. I haven't seen too much the other way around (i.e., requiring Windows Server).
I'd say put Windows Server in a VM for working with anything that will actually need it."
"Personally, there isn't really any downsides (apart from the additional cost).
The downsides are things that everyone is aware of - themes, sounds, aero e.t.c, however you can install the windows desktop experience feature.
Also, remember Windows 7 is, Windows 7 and Windows Server 2008 (I think even R2, but I could be wrong) is built on the Vista kernel (Mind you, there are people who say Windows 7 is just a service pack to Vista!)
Personally, if I was you, I would install Windows 7 and just use Windows Server 2008 in a VM - especially as you are using Sharepoint for developer stuff, it would mean that you can't mess anything up and can take snapshots e.t.c.!"
"server is good for virtualization also. You can install the r2 server and then install additional oses using hypervisor. its one of the pluses. btw you can now install the virtual oses in a VHD file. VHD file is a virtual harddisk and load it in the hypervisor.
-->But now here is the great thing!! you can prep your VHD file in such a way that it can also boot outside the R2 servers virtual environment. essentially the VHD can be run as virtual and native mode(win7/2008R2 os only atm) also."
"Go with Windows Server 2008 R2. It is all I run on my desktops and Laptops. It will run everything that Windows 7 Runs, with one Caveat. Certain Software such as Anti Virus etc, check to see whether you are on Client or Server OS. Some will not install. Otherwise you will be faster and better able to do your development. There is not anything that you cannot configure. Themes, personalization, desktops, aero, gadgets, etc, as well as media center. All can be enabled and/or installed on Server 2008 R2.
There are those who are hardcore and run Server OS'es, and then there is everyone else. You won't regret it."
