Quoting Windley's Technometria 

Over the last four days, I’ve been exploring how to convert physical Linux boxes into virtual machines. VMWare has a tool for doing P2V conversions, as they’re called, but as far as I can tell it only works for Windows physical machines and for converting various flavors of virtual machines into others.

I’ve had a Linux machine that I’ve used in my CS462 (Large Distributed Systems) class for years. The Linux distro has been updated over the years, but the box is an old 266MHz Pentium with 512Mb of RAM. Overall, it’s done surprisingly well—a testament to the small footprint of Linux. Still, I decided it was time for an upgrade.

Why Go Virtual

In an effort to simplify my life, I’m trying to cut down on the number of physical boxes I administer, so I decided I wanted the new version of my class server to be running on a virtual machine. This offers several advantages:

• Fewer physical boxes to manage
• Easier to move to faster hardware when needed
• Less noise and heat

I could have just rebuilt the whole machine from scratch on a new virtual machine, but that takes a lot of time and the old build isn’t that out of date (one year) and works fine. So, I set out to discover how to transfer a physical machine to a virtual machine. The instructions below give a few details specific to VMWare and OS X, but if you happen to use Parallels (or Windows), the vast majority of what I did is applicable and where it’s not, figuring it out isn’t hard. I’ve tried to leave clues and I’m open to questions.

Note: I’ve used this same process to transfer a VMWare virtual image to run on Parallels. The are probably easier ways, but this technique works fine for that purpose as well—it doesn’t matter if the source machine is physical or virtual.

Check out his procedures for doing so, here.