VMWare server to replace computer lab?

I have three labs (30 machines each) of old Win98 machines. My client is a school who really can’t afford 90 new machines. Do you think I could run 30 WinXP VMs on three VMWare servers and have the ’98 machines RDP into specific VMs? What would the server specs need to be? I’m considering maybe quad Opterons and 8 GB of RAM (256 MB per machine). These machines will mainly be used for web access and working in MS-Office. How well can VMWare prevent a VM from hogging all of a CPU? The times I think server load may be a problem is at login at the start of each class period and when students visit web pages with Flash that pegs the CPU.

Thanks,

Ryan