eugeneb,
It looks like it was not able to start the vmkfstools copy on the source "XP_OA.vmdk" file which is the Virtual Machine that you're trying to backup. Can you check to see if "XP_OA.vmdk" is actually made up of multiple sparse VMDK files? Either "cd" to that directory and look or cat out the "XP_OA.vmdk", this is the descriptor file and should show you if it's a full or 2GB sparse files.
Also which mode are using to backup (full or 2gb sparse)? Are you just testing this with one Virtual Machine? There is a "DEVEL_MODE" flag that the top which you can set to "1" and this will just print out the information about your Virtual Machine and not run any type of backups, this just validates that the information it's pulling from the host is correct. Secondly, I would check the NFS datastore, make sure you can write to it and there are no issues.
Update: With some testing, I've found you can go from sparse->full or sparse->sparse without any issues. Are your VMDK's stored in the same datastore as your VM, technically that should not matter since it should provide the full path of the VMDK when it tries to copy. I would probably suggest manually running a vmkfstools copy on this VM and see if you can get it to work. Also if you can provide us with the listings of that directory and cat out the VMDK descriptor file, that may also shed some light.