Ok, so I have read a bunch of material on-line and curious as to your thoughts on split vs monolithic disk in a production environment.
We are going to be building the VM server on a server that has 4TB of disk space in a RAID10 configuration. We have the OS (Ubuntu ext4) on a monolithic VM and are going to be adding another disk to the VM for the "data". Now since the new disk will have 3.5TB which is the best option, split disks or a monolithic disk? I have read pros and cons of each (Vmware Discussion) but I'm not sure what is the best option because of the disk size we going to be adding.
One other thought we had was to create multiple monolithic disks (1TB each) and add them to an LVM. Any benefit in this approach?
VMWare Server is out of date and performs rather badly compared to modern hypervisors. Unless you have tagged vmware-server by accident and were meaning ESXi, you seriously should think about using another virtualization solution, especially since you are setting up a new server.
Using split disks would result in a rather large number of files (1,750 2-GB-chunks) which in turn may create interesting interactions with your O/S. As the upper disk limit for VMWare Server is 950 GB, you would not be able to do without any kind of splitting, so the suggestion of creating several disks and using them as PVs within a volume group to get a large logical volume is surely one of the more straightforward approaches.
With ESXi 4, the disk limit is 2 TB, so the basic problem of large disks persists. ESXi 5 allows for larger virtual disks and since it is the latest release, it should be the first choice for your setup, if you want to stick with VMWare's product line.
I would not use split disks in ESXi. All the reasoning for 2-GB splits is either compatibility with software wich did not support larger files the past (old VMWare releases) or better handling in a client virtualization environment. Both would not apply to a usual ESXi deployment and just increase the number of files to handle.
Having split drives is undesirable if you can avoid them and are concerned about performance. The produce the same effect as a badly fragmented drive, for the simple reason that they are multiple fragments on the physical drive. The only reason I can imagine for not using a monolithic drive is if you backup the drive files and your backup software can't deal with a monolithic one for some strange reason.
Unless you have a real need to break the drive up into multiple pieces don't do it.
Unless you're using FAT for portability it would be surprising to run into 2 or 4 GB size limits anymore. However, if you want to backup your virtual disk to a compressed NTFS volume (unlikely in the described scenario) you should note that NTFS compression fails for files over roughly 50-60 GB. So this is one more reason you might want to split the disk.