Just a quick tip here. During some tests for an ESX 3.0 project, we imported some GSX 3.2 virtual machines in ESX 3.0.1 with VMware's Virtual Machine Importer 2.0. That process went fine and Virtual Machine Importer works really well.

The imported virtual machine was configured with 256 MB of RAM. When we changed the virtual machine's memory (on ESX) to more than 512 MB of RAM, the virtual machine became very slow. So slow that it was not usable. Inside the virtual machine, the CPU was maxed out (system process). From the outside however (esxtop), the machine did not seem busy at all.

The problem was that, during the import, the sched.mem.max setting was set to 256 MB of RAM, thus limiting the virtual machine's memory. Changing that setting to unlimited (or to a more realistic value) fixed the slowness.

Bottom line: after importing with Virtual Machine Importer, adjust the sched.mem.max setting if you plan on increasing the virtual machine's memory. This can be done with the GUI in the virtual machine's settings in the Resources tab.