So you would like to P2V a Windows 2000 server with SQL installed to a
ESX 3.5 Environment?

If so,

Is the server heavly utilized? (CPU, Memory, I/O) If the server has
high I/O, I would suggest doing testing on the VM for your environment due to
SQL running on on a VM. Not recommended on high I/O SQL databases. You will get
better performance from certain phy setups over virtual. That's why you shoud
test the VM.

If the VM performance is sufficient then, I would try to install a
fresh copy of Windows 2000 and SQL, duplicated the settings and restore the DB
on the clean system. I've done testing on Win200 server with SQL that have been
P2V'ed compared to VM's with fresh installs and restored DB and the performance
is greater on a fresh installed VM with a restored DB than on the P2V'ed VM.

VMware v4 is supposed to do a better job with SQL VM's. VMware 2.x was not
SQL nice, v3.5 is much better but hopefully v4 will keep me from putting highly
I/O'ed SQL boxes on phy servers...

To P2V the server used the Converter tool. Be sure to stop SQL and all services that you can. If you have any hardware monitoring software installed be sure to disable the services. You can enable them when the P2V is complete. You might have problems starting SQL on the VM is you have assigned specific CPU's to it. Let us know if you run into any problems.

And as always, test, test, test before you release to production.

Have a great New Year!!