1. Am I better off installing ESXI on an SD card and leaving the entire internal storage for my VM's?
yes its would be a better option for you to install the ESXi on the SD card. so that even if the local storage drives fails it does not affect the entire Host.
2. As far as replication of my VM's for DR is the vsphere replication appliance suffice or should I be looking at a different product?
If you ask me i would say the vsphere replication appliance should be good enough for the environment.
Other things you could check is these documents.
Since we are going to be running CPU Intensive applications , Please asses the environment correctly and get a better understanding of the performance on virtualized Environment, http://www.intel.in/content/dam/doc/white-paper/virtualization-xeon-sap-and-vmware-virtualizing-resource-intensive-appli…
This whitepaper should be helpful
http://www.vmware.com/files/pdf/techpaper/VMW-Tuning-Latency-Sensitive-Workloads.pdf