From the readme.txt:
Converter 4 was rewritten quite a lot and now fully depends on VSS for the snapshot. This is the main reason why it was not as easily put to PE as version 3.0.x was. A working VSS is required and can be achieved by using this package; http://www.mediafire.com/file/nz4zhyrz5t3/vss_fix_2003.rar If the command "vssadmin list writers" fails or returns nothing, then Converter 4 will definately NOT work when converting local drives. How to: Preferrably use the batch, VMware-converter-4.0.1-161434_extracter.cmd, to unpack the installer. Copy "Converter401_LODR.exe" into the directory "Converter_401". This directory can be renamed to whatever later on if wanted. Get the installer from; https://www.vmware.com/tryvmware/p/activate.php?p=converter&a=DOWNLOAD_FILE&baseurl=http://download2.vmware.com/software/vi/&filename=VMware-converter-4.0.1-161434.exe From a running PE, locate the prepared directory and execute the loader, Converter401_LODR.exe, once. This is a slightly stripped down version. If you want all files, then remove the "/EXCLUDE:c401_setup.txt" from the batch. Cloning local drives will require VSS, and VSS is often associated with the term hotcloning. This operation we now do is in fact coldcloning, since probably nothing is run from or is open from the "to-be-cloned" local drive. So we now do coldcloning in hotclone-mode. Lets call it "tempered-cloning". Why: Version 4 has broader support for OS and image formats to convert, than version 3. Limitation: - 32-bit only. - 2003 sources are required if cloning local machine (tempered-cloning). - Needs writeable %SystemRoot% and at least 1 NTFS formatted partition (vss limitation).
The VSS fix for 2003 builds, should let you do most of what VSS was made for, including working on local shadows.