Disk snapshots are one of the best data-protection mechanisms available in the data center today. Whether it's a SAN-based snapshot technology or one built into your file system or operating system, maintaining a solid snapshot regimen can really save your bacon when things go wrong. However, not all snapshot technologies are built to serve as direct hedges against unintentional data loss. A great example of this is the snapshot technology built into EMC VMware's vSphere ESX server and desktop virtualization platform.
Unlike other snapshot technologies, VMware's snapshots are not well-suited to being used as a data protection methodology. Trying to use them that way -- creating and maintaining periodic snapshots of a production server virtual machine, for example -- will result in terrible I/O performance as well as significantly increased likelihood that the snapshots themselves will become a risk to production. However, that's certainly not to say that this snapshot technology is without purpose. VMware's snapshot capability is an exceptionally useful tool; you just have to know where and how to use it.
Essentially, there are two things these snapshots are really good for: 1) allowing a virtual machine's disks to be isolated from write activity so that they can be backed up, and 2) providing a short-term failback during patching and software upgrades. In development environments, you'll see snapshots used extensively to maintain many point-in-time images as changes are made. However, using snapshots in this manner in a performance-sensitive production environment is rarely advisable.
The reasons for this have their foundation in the nitty-gritty of what VMware's snapshot technology actually does. Understanding this is the key to being able to use them effectively.