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The virtual machine (VM) and virtual hard disk specifications used by Virtual Server and VMware (and Xen) are open and broadly documented, so to do something like this probably wouldn't require more than someone willing to sit down and write an application to do it.
However, the biggest obstacle towards porting VMs from other products into Xen is a matter of the way Xen works. Xen requires that the OS (operating system) in question have certain support extensions compiled into it, so it doesn't yet allow any old garden-variety OS to be ported into it. (Note that with Xen 3.0 and the appearance of Intel and AMD processors that have hardware-based virtualization features, this is changing, so I imagine it will be possible sooner rather than later.)
This was first published in October 2006