VMWare by default enables SSL encryption during the Physical to Virtual (P2V) and Virtual to Virtual (V2V) conversion process.  This has the effect of bringing the transfer rate to a crawl of as low as 200kbs instead of the expected 40mbs or better.

The problem is a VMware proprietary protocol called NFC that is used to create the source image and encrypt the data during the transfer process.

The SSL feature of the NFC VMware proprietary protocol can be disabled in a file called:

converter-worker.xml

located in one of the following places depending on the Operating System:

Windows Vista, Windows 7, Windows 2008
%ALLUSERSPROFILE%\VMware\VMware vCenter Converter Standalone

Windows XP, Windows 2003, Windows 2000
%ALLUSERSPROFILE%\Application Data\VMware\VMware vCenter Converter Standalone

Find this section of code and change the highlighted TRUE to FALSE.

<nfc>
<readTimeoutMs>120000</readTimeoutMs>
<useSsl>true</useSsl>
<!– Delay is specified in milliseconds, -1 denotes the default.
<acceptTimeoutMs>-1</acceptTimeoutMs>
<requestTimeoutMs>-1</requestTimeoutMs>
<readTimeoutMs>-1</readTimeoutMs>
<writeTimeoutMs>-1</writeTimeoutMs>
<fssrvrReqTimeoutMs>-1</fssrvrReqTimeoutMs>
<fssrvrWriteTimeoutMs>-1</fssrvrWriteTimeoutMs>
–>
</nfc>

—–

Should be:
<useSsl>false</useSsl>

It is CRITICAL that the “VMware vCenter Converter Standalone Worker” Service be restarted.  DO NOT FORGET THIS STEP!