OK.
More info.
I am attempting to convert P 2 V, R2 Win 2K8, as here:
http://sanbarrow.com/p2v2008r2.html
P2V I used Sysinternal's Disk to VHD tool, creating a .vhd file of my running server.
I then xfer the .vhd file to a (different) running system, mount it, chkdisk it, remove unnecessary partitions, resave, and attempt to use "StarWindConvertor" to create a .vmdk of it. (The outcome is the same if I do NOT mount, chkdisk, etc)
According to StarWindConvertor, the .vhd is a "MS Virtual PC growable image".
If, during attempted conversion , I select "VMWare growable image" I get the error (7) as mentioned, regardless of SCSI or IDE choice, regardless of location of store (local, NFS, etc.)
On the other hand, if I select " ESX Server image", I then get the "File I/O error (5)" message with a zero sized .vmdk file on the storage option of my choosing.
I do not have available storage to try a VMWare Pre-allocated image, nor to try a RAW image.
Though this method has not produced a "bootable" .vmdk as yet, I have successfully created a mountable readable/writeable vmdk using WIM from the mounted .vhd, so I believe the P2V .vhd conversion to be successful.