Your processor settings will have no impact on the booting of the server.
Check these other threads, could be you are using the wrong scsi controller or you boot.ini has problems. Windows 2000 should use the Buslogic controller, Windows 2003 the LSI.
http://www.vmware.com/community/thread.jspa?messageID=593250��
http://www.vmware.com/community/thread.jspa?messageID=565527��
http://www.vmware.com/community/thread.jspa?messageID=591688��
To view and edit your boot ini, first make sure and shutdown the VM you are trying to convert. Then all you do is shutdown the VM you are going to use to attach the HD to. Then add an additional hard drive to that VM, browse to the vmdk file of the VM you are trying to convert thats it. Power up the VM and you should be able to browse the second hard drive. When you are done just remove the HD from the VM (make sure you remove and do not delete the vmdk). Once removed you can power up the converted VM again.
Optionally you can use a boot disk like BartPE or UBCD4 on the VM to edit the file. When you use a boot CD you have to hit ESC at the BIOS screen to select a different boot device (CD-ROM).