It seems that iscsi target files are created as files "with holes" and do not reduce the diskspace. This is not so good. I currently use freenas via nfs and iscsi connected to a esx server 3 to get an impression of performance. I created a 150GB iscsi target on a partition of 200GB. Both are connected to the esx server via nfs and iscsi at the same time. Now I see 350GB free space on the ESX Server. Every time I write something on the iscsi target the size of the nfs target decreases. freenas should create a target file as one monolithic file at creation time reducing the free space immediatly. This would prevent fragmentation problems too.