There are many many alternatives out there that will assist you to migrate a Physical machine to a Virtual - heck, even NT Backup can be used to accomplish this.  The supported procedure recommended to carry out this procedure is to use ADS to create an image of the source machine and then dump it to a Virtual Machine.  I am currently testing this procedure and trust me, it is not a straightforward one.

Given the choice, I would recommend any other approach when carrying out a P2V migration.  VMWare currently released they migration utility that allows to move physical machines to virtual ones.   It even goes the extra mile and imports various virtual machines from other solutions such as Microsoft's Virtual Server.

This is perfect for users of VMWare, but what about if you want to carry a P2V migration to the Virtual Server format?  Well, you can still carry this out by using VMWare's tool and then using this utility to convert from VMWare to Virtual Server format.  Not the cleanest solution, but I guess this is a perfect example in which the ends justify the means ;)