I recently learned how to set up a multi-seat Linux machine, this appears to be the only cost-effective solution for the small school that would use this as a tiny computer lab. However, most students are not familiar with the Linux interface, and we need certain Windows software.
So, my thought was that a multi-seat framework could be set up with a lightweight Linux distribution, with each user running Windows through VirtualBox with Windows getting most of the disk space and computer power. Is this possible? If it is, how powerful a computer would I need to make it viable for say 8 users?
It depends on the usage.
If you want to go with Windows within VirtualBox, you should probably get a licence for each running instance in theory (which may increase the cost more than you think). You can probably get away with 1GB per user with Windows XP but you'd need 2GB to 4GB with Vista or 7 (it really depends on what the users want to do). Remember that when you're sharing a machine, even if you have multiple cores, even if your CPU has the virtualization extensions, at least some of their cache will be shared and there will be some contention regarding memory access. It might not all be as smooth as you'd hope.
A solution based on Windows Server, perhaps with additional software, might be more appropriate.
I suspect you'd also need some rather specific hardware. The page you link to seems a bit outdated in that respect: 1GB of RAM for the whole machine and PCI graphics cards. I must admit I don't know if cheap hardware can cope with multiple graphics cards so easily nowadays.