As a few folks on our forums have noted, there was a problem getting VMDK's produced via VMWare Converter to be read into our Vmdk2Vhd tool. Well, I'm happy to report that we found the issue and Vmdk2Vhd is now converting those now without issue. The download has been updated to version 1.0.13, so grab an updated copy and give it a try.
The big holdup in getting through this problem was actually getting VMWare Converter to just do it's job so we'd have something to test against. After spending what seemed to be like forever testing a number of different machines we finally came across one laptop that would actually P2V correctly. I guess there are a number of users having problems and the strange thing is that these problems seemed to crop up somewhere between beta and release. Regardless, we made it through and got Vmdk2Vhd updated and all is well on the playground once again.. for a few seconds at least.