I successfully migrated NetWare 6.5 from VM Server 2 to ESXi, something, I'm told, previously thought impossible. Unfortunately we need to keep the vm running even after we get SLES in place because the client's library software, Spectrum, runs on it. It actually wouldn't have taken as long as it did if I had enough free space local on the machine I was remote'd into; using network locations caused issues. So ideally you should free up enough local space on a Windows machine to work with two separate copies of the VM files.
The first step was making a copy of the VM files from VM Server 2. Best practice here is to shutdown the guest OS. In this case use the 'down' command to shut NetWare down. Then, in your host OS, navigate to your storage location which should be displayed on the VM's summary screen. If you're running a linux host copy the files to a Windows machine with enough space. If your host is Windows I strongly suggest making a copy to work with, just to be safe. In my case it was a 63GB thin disk, so 126GB of space would have been nice. At the very least you need to read from the same machine running vConverter.
Next, if you haven't already, download vCenter Converter (vConverter). You'll need two versions. 4.0.1 and 5. Install 4.0.1 first, hold onto the v5 install, we'll need it later. (There is a linux version of 4.0.1, but I think 5 only runs on Windows, I suppose you could potentially run 4.0.1 from your linux Host and send the output to a Windows machine. Wished I'd thought of that earlier, would have saved a little time.)
Once vConverter 4.0.1 is installed, and the file transfer from copying your NetWare guest is finished open up vConverter. Start a conversion job and use the copy you made as your source. In my case the thin disk was set to 950GB so between available disk space and time allotted I did not want to convert to a thick disk. For information on the difference just google it; it's an easy concept to understand. I set the job to convert the VM to a VM Workstation 6.5 file with a non pre-allocated disk (aka thin disk).
Once the conversion to VM Workstation was complete it got the VM to a machine version of 6.5, new enough to use the latest current version of vConverter; version 5. Uninstall vConverter 4.0.1 and install version 5.
In vConverter v5 start a job. Use the converted file from 4.0.1 as your source, obviously. From here you should be able to convert your NetWare VM up to an ESXi box and upgrade the machine version to 8.
Booted like a dream for me. The only configuration change I needed was to remove a hardware instance during boot. I think it was the second LAN port. I removed it and now everything is working. I assume that an older version of VMware Server might require an older version of vConverter if 4.0.1 doesn't work.