So.. Here is what I know at this point.
1. I have rebooted the box serveral times
2. I have uninstalled, rebooted, installed the TS service again
3. There are no events in the event log either on the client or the server
4. In the Terminal Service Manager, it states that the RDP-TCP (65537) is down
5. The Terminal Service Process is started and running in automatic
6. VMWare tools are installed and up-to-date
7. The client gets the "This computer can't connect to the reomte computer" error message
8. Clents were able to RDP from their XP boxes to this Windows 2000 SP4 server prior to the P2V
9. I have removed it from the domain and re-added it to the domain
I think that about covers it.
Thanks to all in helping to resolve this issue