After troubleshooting some problems with snapshots I ran in to an article on the VMware Knowledge base with some good info. See document ID 1025279 at http://kb.vmware.com/selfservice/search.do?cmd=displayKC&docType=kc&externalId=1025279

This is the article.

Purpose

This article provides best practice information for snapshots. It also provides links to resources that help you understand snapshots and troubleshoot snapshot issues.

Resolution

Best practices

• Snapshots are not backups. As the snapshot file is only a change log of the original virtual disk, do not rely upon it as a direct backup process. The virtual machine is running on the most current snapshot, not the original vmdk disk files.
• The maximum supported amount in a chain is 32. However, VMware recommends that you use only 2-3 snapshots in a chain.
• Use no single snapshot for more than 24-72 hours.
• • This prevents snapshots from growing so large as to cause issues when deleting/committing them to the original virtual machine disks. Take the snapshot, make the changes to the virtual machine, and delete/commit the snapshot as soon as you have verified the proper working state of the virtual machine.
  • Be especially diligent with snapshot use on high-transaction virtual machines such as email and database servers. These snapshots can very quickly grow in size, filling datastore space. Commit snapshots on these virtual machines as soon as you have verified the proper working state of the process you are testing.|
• If using a third party product that takes advantage of snapshots (such as virtual machine backup software), regularly monitor systems configured for backups to ensure that no snapshots remain active for extensive periods of time.
• • Snapshots should only be present for the duration of the backup process.
  • Snapshots taken by third party software (called via API) may not show up in the vCenter Snapshot Manager. Routinely check for snapshots via the command-line.
• An excessive number of snapshots in a chain or snapshots large in size may cause decreased virtual machine and host performance.
• Configure automated vCenter Server alarms to trigger when a virtual machine is running from snapshots. For more information, see Configuring VMware vCenter Server to send alarms when virtual machines are running from snapshots (1018029).
• Confirm that there no snapshots are present (via command line) before a Storage vMotion. If snapshots are present, delete them prior to the Storage vMotion. For more information, see Migrating an ESX 3.x virtual machine with snapshots in powered-off or suspended state to another datastore might cause data loss and make the virtual machine unusable (1020709).
• Confirm that there are no snapshots present (via command line) before increasing the size of any Virtual Machine virtual disk or virtual RDM. If snapshots are present, delete them prior to increasing the size of the disk/s. Increasing the size of a disk with snapshots present can lead to corruption of the snapshots and potential data loss. For more information, see Increasing the Size of a Virtual Disk.

Understanding Snapshots

For more information about snapshots, see:

• Understanding virtual machine snapshots in VMware ESX (1015180)
• Working with snapshots (1009402)
• Using Snapshots in the Basic System Administration Guide for your version of ESX

Troubleshooting

For assistance troubleshooting snapshot issues, see:

• Creating a snapshot for a virtual machine fails with the error: File is larger than maximum file size supported (1012384)
• Delete All snapshot operation results in a Consolidate Helper snapshot when a datastore has insufficient disk space (1003302)
• Taking a snapshot with virtual machine memory stuns the virtual machine while the memory is written to disk (1013163)
• Committing snapshots fails with the error: Too many levels of redo logs (1004545)
• Why snapshot removal can stop a virtual machine for a long time (1002836)
• Large snapshot delete operations time out in VirtualCenter (1004932)
• Commands to monitor snapshot deletion (1007566)
• Consolidating snapshots via the command line (1007849)
• Unable to take a quiesced VMware snapshot of a virtual machine (1009073)

Disclaimer.
The information in this article is provided “AS IS” with no warranties, and confers no rights. This article does not represent the thoughts, intentions, plans or strategies of my employer. It is solely my opinion.