I have a client with an aging infrastructure looking for an upgrade. They currently run three servers, SBS2003, Win2k03 and Win2k Terminal Server. The hardware is working, reasonable midrange HP rackmount, but is all out of warranty (the Win2k TS of course being gun range material). The SBS install is stable with no obvious glitches that seem to haunt SBS installs later in life. The controller at this company is new and not exactly computer savvy and would probably fire us if she got the upgrade quote we'd normally recommend for clients like this -- ESXi hosting SBS2008 and either 2008 server or Win2k03 for their other systems. SBS to SBS upgrades are time consuming and the hardware savings from ESXi won't even register for them.
The radical thought has been put forward to pitch a new ESXi server and P2V the SBS server and the Win2k3 server, with a new server build and licensing for just the Win2k terminal server.
I've had generally good luck with the standalone converter -- I've done a couple of dozen boxes of varying degrees of quality and age and managed to get good running VMs, but something about P2Ving SBS2003 scares me. We have a few clients running SBS2008 on ESXi3 without any issues; we'd like to upgrade them to ESXi4 but are waiting for update 1 to fix the boot volume issues.