I've come across this topic and just want to be certain that I have all the info correct:
1) You need to tar the files/dirs first, which will create a .tar file, i.e.: start w/foo, end up with foo.tar
2) Then, using vmtar, you "specially" reformat the "generic" tar file and you end up with a .vmtar file, i.e: start w/foo.tar, end up w/foo.vmtar
3) Finally, you gzip the .vmtar file, i.e.: start with the foo.vmtar file, end up w/foo.vgz
Y/N?
Thx.