Yes, it would help. I would use a VM that doesn't try to do fancy optimization like using hardware virtualization or x86-to-x86 translation.  A simple, "pure" VM has less opportunities for its programmers to screw up and introduce security holes. Maybe QEmu?

Do as little as possible outside of a VM, and have Bitcoin running either outside all VMs or in a separate VM from your browsing/email/whatever.

Also, see my thread about Qubes: http://forum.bitcoin.org/index.php?topic=11837.0;topicseen