You can tackle the CPU utilization problem a couple of ways. As always, there's the classic brute-force method: Servers with more horsepower have more CPU headroom and therefore are less affected by iSCSI. Simple, but expensive.
Our suggestion: Hardware, baby. Fibre Channel HBAs handle the FC protocol; likewise, to get the most out of your iSCSI-connected servers, you'll need a specialized adapter that will rein in CPU utilization.
These devices work in two ways. Some off-load the TCP stack onto hardware, relieving the system CPU of that burden. Adapters using this method are called TOE (TCP Offload Engine) cards, and they look like any other NIC to the operating system, though you have to add an external iSCSI initiator--the software drivers that make iSCSI work. Microsoft is slated to have one available next month.
The second method is similar in approach to the TOE card, but with a twist: iSCSI HBAs appear to the operating system to be SCSI cards, and they come with their own iSCSI initiators--in iSCSI parlance, the "iSCSI driver."
For our tests, we gathered iSCSI adapters from Adaptec, Alacritech and Intel Corp. in our Green Bay, Wis., Real-World Labs®. Invitations went to Emulex Corp. and QLogic Corp. as well, but iSCSI products from those companies were not ready in time for our test window.