Well all I can tell you is how easy networking is with esxi, since this where I have the most experience. But yes in general networking should be simpler in type 1
With esxi you create virtual switches and then either connect those to physical interfaces or dont. But any vms can be tied to any vswitch or number of virtual switches with virtual interfaces. With esxi it is very simple to create port groups with vlan tagging or not, etc.
http://wiki.xen.org/wiki/Xen_Networking
http://pve.proxmox.com/wiki/Network_Model
So for example in my setup if you just look at internet access and my lan - leave out my other networking segments. I have a physical nic connected to vswitch WAN, and physical nic connected to vswitch LAN.
the wan vswitch is connected to my cable modem.
the lan vswitch is connected to my physical lan switch.
I create a vm, give it a virtual nic and that is connected to whatever vswitch I want. If connected to my lan vswitch it is like any physical box on my network, has its own mac, and to my physical network it is no different than if the device was physically connected to a switch.
Another option for you from opensource for type 1 would be smartos - someone was asking if anyone was interested in a guide on getting pfsense up and running on that, etc. I don't think he saw enough interest to move forward with his guide though.
To me a type 1 is much easier to work with and removes any sort of management of the host OS
type 1 you have
hardware - vmhost os - vms
type 2 you have
hardware - OS - vmhost os - vms
With type 1 your working with an OS that really only thing to do is manage the vms use of the hardware - which is was designed to do.. Not provide all the features that a normal OS does, etc.
Type 2 you have your OS that manages your vmhost OS use of the hardware, and then vms on top of that. If anything outside of extra complexity, and management of that hardware OS lets call it. You have reduced your vm's resources available since your running a full OS, however little those resources are - it takes away from what the vms can use.
Since you mention your working with a limited sort of hardware, I would think anything that reduces overhead would be good. Like removing the OS that your virtual software has to run on top of.
Your solution can and does work - I just don't see the point of it, unless you plan on using the box your planing on doing this on as a normal workstation at the same time your running your VM(s) on it.