Yes, it's possible to use vmware player as a service for Linux (there's a separate answer for Windows); it's easy and there's no reason I can think of not to do it. It's especially great for hosting a headless server from a headless server.
The other VMware-oriented choice, VMware Server, is deprecated and the only other $0 choice I know of is VirtualBox. If you like that better than VMWare Player, more power to you, but I know VMWare Player and I don't see a reason not to use a well-supported path to get what I want.
If you would like to work on your own Windows machine away from the labs, you can, but you need to use Linux in a virtual machine. If you are the really adventurous type, you might try to port the tools via cygwin, but you will get stuck when it comes to serving NFS on Windows for the project. So don't waste your time.
Note: If you use your own vmware-hosted Linux install, you need to make sure you can enable a USB host controller for the virtual machine to connect the NSLU2 directly to Linux. VMware player does not support this when installing a VM from scratch (as far as we know). However, Player does support it, if the image it is using has it already configured - which our image is.
Now you are mostly set up. You will either need to install a desktop environment, or you can ssh into the virtual machine from Windows (run ifconfig to get the IP address to ssh in to). I personally run a Xserver on Windows and port forward from Linux to my display and use emacs, etc... You will need to apt-get install your favourite editor (if it is not vi) or any other software you generally use.
Once logged in, run sudo ifup eth1 to configure the network to the NSLU2. Use ifconfig to confirm eth1 is up with IP address 192.168.168.1. Some students have had the USB ETH adapter attach as eth2, in which case you'll have to delve into the Linux setup instructions to figure out what to adjust.
Before you can start the project, you need to adjust the tftp directory defined in our source tree. The tftpboot directory is /var/lib/tftpboot. You must adjust TFTPROOT in the top-level Makefile (edit directly), and CONFIG_SOS_NFS_DIR in .config (either by editing directly, or make menconfig). You should now be able to follow the normal project instructions.
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