Download the VHD from here:
Download Windows XP Mode from Official Microsoft Download Center
Once you downloaded the file WindowsXPMode_en-us.exe run it. It will extract a file named Windows XP Mode base.vhd.
Copy that to xpmode.vhd and create a textfile named xpmode.vmdk with this content:
# Disk DescriptorFile
# Extent description
RW 268435456 VPCSPARSE "xpmode.vhd"
# The Disk Data Base
ddb.adapterType = "ide"
ddb.geometry.cylinders = "16383"
ddb.geometry.heads = "16"
ddb.geometry.sectors = "63"
Now create a XP VM and add xpmode.vmdk as existing disk. After first boot install the vmware-tools and apply the license that was part of the download.
Done - no need to use Converter
you are the man,.... thanks