Should I run a tiny OS?

I know I'm building a semi-beefy machine, but I'm thinking I might run a tiny Linux distro on it, then use the Virtual Machine idea (see previous post) to choose a larger OS when needed.

Puppy Linux is so compact and fun, and can meet my web surfing needs. If I can use it as a home base for VMs of Ubuntu and Windows, then those operating systems should run like native installs, since the real native OS will be so minuscule.

Here's a thread I found. These guys actually made it work.

Edit: Here's a different distro bundled with VirtualBox AND Compiz Fusion!