Dan, if you are a Neverfail customer, I would recommend you utilize the support site at extranet.neverfailgroup.com. This community is for the VMware vCenter Server Heartbeat product only. If you are meaning vCS Heartbeat then please state this instead of Neverfail. Sorry but it does get confusing when Neverfail is used, yes it is the underlying technology but sold and support as a VMware product.
In answer to your question, there is a little more work required than just pointing the replication at a new VM. we need to get the application and server identity cloned before replicating can commence.
The secondary server is always a clone of the primary (or active) server, this allows us to maintain application mirror and server identity, so to start the VM will either have to be cloned using a P2V utility like VMware Converter or a new VM consisting of a base Windows OS matching that of the primary (or active) server, have matching local drive letters and a second network connection configured on a seperate vlan/subnet to the applications subnet. This would allow the installation to either install onto the cloned server pair or create the cloned server. The cloning process will copy the application and server identity to the base VM. Once cloned, heartbeat will be then started and able to replicate the changes to the protected application data, logs registry and application configuration to maintain a real time copy on the cloned server.
hope that helps
Justin King
Product Specialist - VMware vCenter Server Heartbeat
http://www.vmware.com/products/vcenter-server-heartbeat/