The race between Microsoft and VMWare for the virtualization space can only offer benefits to the end user. The close competition will push the limits of both Microsoft and VMWare in offering the best of each other. Point in case is the (beta) release VMWare's Converter.
The VMWare converter makes the process of moving a physical machine to a virtual a painless process. So far in our tests, we've managed to hack our way with some
unconventional methods, but these take a lot of time. The VMWare tools offers a new level of Physical to Virtual (P2V) conversion by having a manager that can queue operations for this process. It is fully scriptable as well, which can only simply and make the whole process more efficient for system administrators.
Microsoft is not falling behind in this area. The Virtual Machine Manager has plans for not only fully automating P2V conversions but guiding you on the best Virtual Server where the new physical machine can be. Unfortunately, this is not currently supported at the beta stage that the product is right now, but from demos I have seen I am sure it will be a sure contender to VMWare's offerings.
For more info on VMWare's Converter visit
this page and for Microsoft's Virtual Machine Manager info, check
this site out.