I had this error when I installed version 4.x.x of the Converter software on a Windows 2000 server. After some research it seems that ONLY the Converter 3.0.3 version is compatible with Windows 2000 Server SP4. It is a tricky version to get hold of but is available if you search.
Had an issue moving a Windows 2008 x64 R2 Server and constantly recived the error unable to determine guest operating system.
Found this excellent solution here http://wiert.me/2010/06/10/vmware-converter-4-01-unable-to-obtain-hardware-information-or-unable-to-determine-guest-operating-system/
Was able to change the guest operating system to just Windows 2008 and was then able to convert. Then I was able to change the guest OS back to R2 x64 after the conversion.
You receive the following error at the point that the Converter utility is verifying the source and destination directories.
VMware’s advice is to open up the Disk Management section in Computer Management and ensure that there are no virtual devices mounted as the Converter fails when it attempts to emulate them. This could be an .iso file that has been mounted as a physical drive using emulation software.
In my case however the Converter failed because there was an Iomega Zip drive in the PC that was being converted. Removing the zip drive resolved the issue.