There are plenty of peopl running VM's on SATA disks. (thinks IBM XIV) but to get the performance you need to front end this with some Flash, if you need cheap but perfromant SAN, have a look at NexentaStor (http://www.nexenta.com) they are bascially a Software only SAN that runs on roll your own hardware, they do have some prefered and tested builds, but basically you can build a SAN with standard hardware, stick a couple of Enterprise Level SSDs in for Cache and you get serious perfromance.
disclosure: ( I used to work for the company)