There appears to be many issues with Windows XP as a development platform, not only for Netweaver, but for any application which requires a large amount of contiguous memory. I'm not prepared to recommend to our group that we use XP for development, due to the re-basing requirements of the various DLL's that fracture the memory address space, thereby preventing large-scale allocations of memory to the J2E engine. There are others reasons for not re-basing DLL's, namely the departure from company-installed code, issues with O/S updates, support issues, etc.
Linux, however, does not have these issues, as it properly handles memory.
Out of curiosity, what environments are people using for development? What O/S? Are you hosting a local J2EE?
Granted, if you're not hosting a local J2EE then these memory issues do not assert themselves, but I want the ability to run Netweaver locally without having performace suck. (ie: 1GB of memory or more allocated to the engine).