A NAS is cheaper storage than a SAN – Both can use RAID, if you had four 16 TB NAS boxes they would appear as 4 separate pools of storage, conversely, four 16 TB SANs would appear as one 64TB central pool of storage. Furthermore, a SAN can be set up to asynchronously replicate with another SAN over fiber perhaps in a different building, also a SAN can synchronously replicate with another SAN on a different site.
Having an iSCSI interface on a SAN which therefore means the hypervisor is installed on the physical server yet it actual storage is on the SAN, meaning you can upgrade the entire physical server/blade without having to deal with moving large amounts of data about. Growth of the SAN is also easier, just by another SAN and add it to the pool.
An example of how ESXi or Hyper-V can be used with a SAN (Two boxes), if you buy two servers with no hard drives at all, use a memory card installed inside the server to install the hypervisor (Install VMWare ESXi or Hyper-V) with one SAN (Two boxes that replicate with each other) per site, you can use the servers CPU and RAM to connect directly to the storage.
The servers can then be separated into tier 1 and tier 2, etc allowing the virtual machines to use the CPU or RAM on a particular server. When VMware ESXi 4.1 Standard is used, you can use the vMotion to transfer servers whilst the users are using them.
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