this is nice, but I'd guess that most of the time the converted VHD won't boot inside a virtual machine. After cloning the files to the virtual disk, it's quite often that registry and system files need to be tweaked in order to boot.
For example, dual core XP, will not boot inside a vm with a single virtual cpu.
We will soon release MyOldPCs converter, which converts live system to vmdk/vhd/vdi, and can boot via vmware/vpc/vbox/hyper-V, etc. More info can be found here: MyOldPCs Overview
(website still work in progress)