Before you go out and buy vmware, I would give VirtualBox a try. It is free for non-commercial use and works pretty well. As I recall, it even has decent openGL speed.
In terms of a distribution, I'd consider Ubuntu, if only because it seems to be the most popular these days, so there is a fair bit of support out there on the forums if you have a problem. Plus, there is a TON of software that has been specifically packaged for it (moreso than other distros), so it is very easy to install stuff/upgrade, etc. It is probably not frugal on RAM, but any distro using Gnome or KDE would have the same issue.