Here's how you can convert from a VMWare virtual machine to a VPC (Microsoft) virtual machine:

  1. Microsoft’s System Center Virtual Machine Manager will perform V2V conversions.  It converts to Virtual Server 2005 and Hyper-V.
  2. The other way is as follows: [more]
    1. Back up/clone the virtual machine.
    2. Remove VMWare tools from the virtual machine.  (VMWare tools are incompatible with VPCs.)
    3. Run sysprep on the virtual machine.  (This removes hardware-specific information.  Supposedly, the newer Windows OS’s are hardware-independent, and do not require this step, but I could not find an references to people who did it successfully without running Sysprep.)
    4. Copy the virtual disks (VMDKs).
    5. Convert the VMDKs to VHD files.  There are a number of tools which claim to be able to do this.  The one I found that actually completed the process is the StarWind converter.
    6. Create a new VPC and use the VHD files.

 On another note, the Windows 7 virtual PC requires a certain level of processor.