The Windows Server Division blog has a post up trumpeting a very impressive iSCSI benchmarking result achieved with Intel hardware and Microsoft Windows Server 2008 R2 software in January of 2010. Running on server hardware equipped with an Intel Xeon 5580 CPU and an Intel 82599 10GbE network interface card (NIC), Windows Server 2008 R2 achieved 715,000 IOPs. The Windows Virtualization Team blog has some more details here. This is even more interesting because it was done on Hyper-V.
Both Intel and Microsoft recommend enabling jumbo frames for iSCSI workloads. It is important to make sure the entire network path has it enabled.