Hi Boneyard,
let me try to answer that question. The main difference between a fastl4 and a L7 virtual server becomes clear, when you look where the TCP connection gets terminated. FastL4 changes the destination ip and maybe port, maybe src ip, but the TCP connection still spans from the client to the server. This works fine, but with doing that you miss out on the TCPExpress optimisation F5 offers.
So, lets assume your server is an old solaris stack, not supporting window scaling or Selective Acknowledgements. This is fine for a controlled environment, like the local lan, but when serving clients out in the wild on a high latency WAN link, there is better stuff to do.
Therefore i use, if i can, always the L7 virtual server, which will maintain a server-side TCP connection to the old server, and will handle the client-side connection using our optimized, state of the art TCP stack, and therefore ensure best data delivery and user experiences, even on a lossy WAN link.
So, to answer your question here, in your case one would also use the L7 virtual, in order to get the most out of your f5 devices.
hope that helps,
Christian