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 I've just come across an awesome little tool called VMDK2VHD.  VMDK2VHD converts VMware virtual hard disks (VMDK) into Microsoft VHDs.  The download contains 3 files total 112K - you just run the VMDK2VHD.EXE    ...nice!
  Anyway I've run through a conversion and it worked a treat.  I used the 'Dugie-thumb-in-the-air' guide below: 
- 'Scrub' the VMware Image using the first half of that very fine guide from Chris Wolf  over at SearchServerVirtualization.com
 
- Use VMDK2VHD to convert the VMDK virtual disk to to a VHD 
 
- Create a new VMC with roughly the same hardware (IDE drives, etc, etc) in Virtual PC 2007
 
- Attach your newly created and converted VHD
 
- Power up you new VMC, login and wait (a few minutes) for *all* the new hardware to be detected
 
- I clicked cancel to the new hardware driver wizard
 
- I also clicked no to the reboot - hey livin on the edge here
 
- Install the Virtual Machine additions (v13.724)
 
- Reboot
 
- Let the hardware wizard run
 
- Tada!
  
The VMDK was 1,986 Mb and it converted to a 2,001 Mb VHD in about 15 minutes on my aging T41p laptop. Overall with VM reboots, coffee, etc, etc the whole conversion took about 40 minutes. 
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