Ok I did this but here is my problem I'm not getting a blue screen when booting into the install.
Here are a few items to note and I can always go back and rebuild the VMDK file if I did something wrong.
This is installed in Linux and I had to install the grub installer on the original disk containing the 2k3 install. So what I did was build the vmdk and remove grub by booting into recovery console and running:
FIXBOOT C:
FIXMBR
BOOTCFG /rebuild
I don't think it is an issue with the bootloader as it starts to boot windows but quickly gives blue screen. I think this is more of a hal issue.
Any ideas?