I would have a look at VisualSVN Server. It installs easily on Windows and addresses all your concerns.
Installing into a VMWare image would mean that it's become portable between systems. As long as you don't require access from external sites I would go with that solution. You could use a pre-built VMWare image[1] or create your own pretty simply using a Linux distro like Ubuntu[2]. Alternatively, you could go with a lightweight Linux solution[3][4] and install just what's needed for SVN to function.
I personally have a Linux server set up in my house (soon to move to my office) that hosts my SVN repository - if you can sacrifice an old machine, this is a by far the best way to go.
[1] http://www.vmware.com/appliances/directory/308
[2] https://help.ubuntu.com/8.10/serverguide/C/subversion.html
[3] http://archlinux.org
[4] http://damnsmalllinux.org
I'm no SVN expert, but we are a windows environment and we switched to SVN recently.
We've been very happy with the (free) VisualSVn server, which doesn't do much but does make it a bit more 'windowslike' for the management.
http://www.visualsvn.com/server/
works great For hosting in this environment- in terms of separate PC or vmware image--both could work; for repository backup on windows environment, it is a bit of a pain, but we use something along these lines:
For home projects, I was using VisualSVN Server. It was so easy to use, and setup was so minimal that I convinced my boss to replace SourceSafe at work with it. Literally, it was set up in minutes. Security access was a breeze as well. We purchased the plugin for Visual Studio from VisualSVN also to allow us to commit and update projects right from the IDE. This requires TortoiseSVN to be installed on the client machine. All server configuration can be run directly from the VisualSVN management console, which also snaps in to the Computer Management console of Windows.
I'm sorry for giving this answer you probably don't want to hear (read), but don't your requirements just yell "GIT!"?
It's ideal for situations where you just want to use a version control system without the hassle of setting up a repository. Just git init
and you're set to go...