Creating virtual machine from existing DMG/ISO file

[jrrdnx]

I have a DMG file from an old desktop computer I dismantled several months ago.  Originally, I only created the DMG as a quick backup solution but now I would like to use that as the basis for a virtual machine.  I'm not sure how to go about telling Fusion to use this image or if I just need to convert it to a virtual disk and how to go about doing so.  Thanks in advance for your help.

VMWare Fusion 2.0.7

Mac OS X 10.6.6

[ColoradoMarmot]

Since it's a DMG, I presume it's a Mac you're talking about.  Apple doesn't allow virtualizing the OSX client, so you're out of luck.

[jrrdnx]

It's a DMG because I used my Mac to create it, but it contains the C drive from my old desktop which was Windows XP Pro.

Edit:  If it's easier, I've created an ISO file from the DMG.  I just need help converting the image into a virtual hard disk for use in Fusion.