Is the kind of setup I describe possible and if so what things do I need to look at when configuring such a thing?
That's one of the most common types of setups I help our support customers deploy. Works great. My presentation from DCBSDCon covered this type of setup. http://www.youtube.com/watch?v=aElQidbWUxA
The book has a lot of content that goes over things you need to consider here. http://pfsense.org/book
If there are problems with the above description (such as LAG not working between multiple switches, as I've already identified as a potential gotcha :-[),
[/quote]Only lagg with bonding (LACP, EtherChannel) tends to be a problem there. The failover mode is what people generally use for their servers between switches like that.