This is a really helpful thread that deserves a refresh. A lot has changed since the last post!
I'm posting where I'm at (so far) through my own trial and error in the hopes of maybe helping out someone who could use it, but mainly in the hope that some of you DP gurus can shed some of your latest pearls of wisdom. Please feel free to help a neophyte along the way!

It seems for most, slaves are the way to go. But for now, I like to keep it all in one box for the sake of my sanity.

Currently I host all V.I.'s in 3 instances of VE Pro Server. One for percussion (an EWQLSO and an SD2), one for LASS 2.0(5 K5's), and one for everything else (Albion, Cinebrass, Omni & EWQLSO Choirs-which I only load when needed). DP's buffer is set to 256, and I go back & forth with the VE Pro buffer. I'll switch it to "0" for parts I'm playing in, but they're usually set to "1".
I started with the manual's suggestion:
"Audio Preferences: You may change the number of used threads in the Multiprocessing drop-down menu in real-time, and each Vienna Ensemble PRO instance will use the specified number of process threads. So 1 instance on an 8 core computer should use 8 threads, 2 instances should use 4 threads, and so forth. Ideally you should have as few threads as possible. If you're also running your host sequencer on the same system as the running instances, it might be wise to reserve a core for it.
To keep it simple, set the amount of threads to your amount of cores. If you run into performance issues, lower the amount of threads."
While my first instinct isn't to buck convention - after experimenting I've found that for my setup, having the Default Thread Count set to 12 kept DP's Audio Performance from flashing in the red - and the least amount of stuck notes in LASS as well. By the way - I have K5's Multiprocessor support turned off. That helped a lot in the beginning.
I've recently upgraded from DP 6 to 7.24 and a couple of annoyances have popped up. The first is that I can't use my scheduled Automator script to launch everything in the morning. For some reason 7.24 sometimes gets hung up on the small "Reading Project" window. Not too big of a deal though, as it only takes 2 clicks and about about 10 minutes for everything to fully load - and I can get coffee while that happens. The other thing is that I now have to stop projects from playing in order to switch window sets or DP will unexpectedly quit. Does that happen to anyone else? In all, it's not enough reason to switch back to 6.0.3 - but it does have me just as eager as everyone else for vers 8.
My drive setup goes like this:
Bay 1 - 500GB WD Caviar Black: Projects Drive
Bay 2 - 500GB WD Caviar Black: Strings
Bay 3 - 640GB WD Caviar Black: Brass, Winds, Perc
Bay 4 - 500GB WD Caviar Black: OMNI, Choirs, Albion, Pianos
"Upper" - DVD drive
"Lower" - 2TB in 2 partitions: Backup boot (I know I can restore from TM, but it helps my paranoia

"Lower" part 2: 128GB M4 SSD: OS and apps. I'm thinking of swapping the strings onto this and putting the OS back on the Caviar. (BTW, this gets power daisy-chained from the "Lower Bay" with the data going the mobo. The HDD is going into a Sonnet Tempo E4i pcie card. There are 3 more open connections on that card (which was very helpful in the old G5), but I don't know how I'd power them!

I've read somewhere that going with a SAS card for SSDs is the way for this machine to get SATA3 speeds, but still researching into the overkill aspect of that.
So, there it is. I'd love to hear what other folks with their Mac Pros flying solo are up to!