So in trying to move my windows 2008 server VM to another server I encountered a problem. When using Vmware converter standalone and you choose vmware file as the source and click "next" it sits there on the "Retrieving Source information" and then times out after about 2 hours. After a lot of trial and error, I found that some how the permissions on the .vmx file were hosed. I had to chmod 777 -R the vmware directory to get it to convert the VM to another server. The source server is a ubuntu 8.04 32bit server with the ext3 file system and the new server is a Debian "Lenny" 64bit server with the ext3 file system. After I chmod'ed the vm directory the converted worked just fine. Keep in mind i was accessing the files via a samba share on each server. It was about 28GB and it converted it in about 1 hour

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Hope this helps!