You can find the troubleshooting topics for P2V here.  

The wizard for P2V is called the "Convert physical server" wizard. In the Administrator Console click the "Convert physical server" action. Here's the "How to Convert a Physical Server to a Virtual Machine" topic text from Virtual Machine Manager help to help you prep the decision-points the wizard will offer you:

To create a virtual machine from a physical server

  1. On the Actions pane in any view in the Virtual Machine Manager Administrator Console, click Convert physical server to open the Convert Physical Server Wizard.

  2. On the Select Source page, configure the following options:

    1. Computer name. Type the computer name of the physical server that you want to use as the source for the new virtual machine, or click Browse to locate the server.
    2. User name. Type the name of a user account that has local Administrator rights and permissions on the source machine.
    3. Password. Type the user password.
    4. Domain. If the domain name field is not already pre-populated, type the name of the domain.
  3. On the Virtual Machine Identity page, configure the following options:

    1. Virtual machine name. Accept the pre-populated virtual machine name, which is the same computer name as the name of the source physical server. Alternatively, you can type a different name.
    2. Owner. Accept the pre-populated value, DomainName\Username, to identify yourself as the owner of the new virtual machine. Alternatively, click Select to specify a different user or group as the owner. The account specified must be an Active Directory account.
    3. Description (optional).Type a description for the new virtual machine.
  4. On the Gather Information page, click Gather System Information to begin a survey of the source machine that lists its hardware and software and identifies any missing components that are required for the P2V conversion. The wizard installs software on the source machine to gather the information but removes this software when the conversion is complete.

    Note
    If a firewall is installed on the source machine, a firewall exception will be created for remote administration (RemoteAdmin service). You can remove this exception after the conversion operation is complete.

    On the System Information tab, you can review the resulting information, such as operating system version, hard drives, and network adapters.

  5. On the Conversion Information page, do one of the following:

    1. Confirm that the message No issues detected appears.
    2. Review any issues that the wizard reports that must be resolved before the conversion can succeed.

Each issue in the list explains how to resolve the issue. After resolving all issues, click Check Again to check for additional issues. When no issues are detected, click Next to proceed.

  1. On the Volume Configuration page, review the lists of all volumes that the wizard lists and determine whether you want to make any changes:
  2. Select volumes to copy. Initially, all volumes appear in the results pane and are selected for duplication to the new virtual machine. The new virtual machine must contain the system volume and the boot volume from the source machine; for example, if the system and boot volume are on the C: drive, the check box for the C: drive is grayed out so that you cannot clear its checkmark. You can remove other volumes if you do not want to duplicate them in the new virtual machine or if the host on which you deploy the new virtual machine does not have enough space to store all volumes.

    Adjust volume settings. You can adjust the VHD Size (MB) field to adjust the size of any volume (NTFS volumes will be automatically expanded to the size indicated); the VHD Type field to adjust the type (Dynamic or Fixed) of any volume; or the Channel field to adjust the channel (for both IDE devices and SCSI adapters) of any selected volume.

  3. On the Select Virtual Machine Host page, review the number of stars under Rating for each host listed under Host Name to determine the most suitable host on which to deploy this virtual machine.

    Note
    If a large number of hosts is listed, use the Host group, Look for, or Group by fields to display a smaller set of potential hosts.

    When you deploy a virtual machine on a host, all available host servers are assigned a host rating, consisting of zero through five stars, to indicate the host’s suitability for hosting the virtual machine. The host rating is based on the virtual machine's hardware and software requirements and anticipated resource usage.

    For each server listed that might be a suitable candidate as a host for this virtual machine, review the information displayed on the tabs for Details, Rating Explanation, and SAN Explanation.

    After reviewing the information on this page, select the host on which you want to deploy this virtual machine, and then click Next.

    Note
    If no host in the list has enough disk space to host the new virtual machine, click Previous to return to the Volume Configuration page and either de-select one or more volumes or reduce the size of one or more volumes.

     

  4. On the Select Path page, accept the default path on the host to which to save files associated with this virtual machine, or click Browse to specify a different path. The default path is as follows:

    <C>:\Documents and Settings\All Users\Documents\Shared Virtual Machines\

    If you select a path other than the default path and want to store other virtual machines on that path, select Add this path to the list of host default paths. For information about configuring default virtual machine paths, see How to Set Placement Options for a Host.

  5. On the Additional Properties page, accept the default settings or modify these settings as described in How to Configure Virtual Server Actions for a Virtual Machine.

  6. On the Summary page, do the following:

    1. Review the settings that you chose by running the wizard.
    2. Optionally, click View Script to view (and copy) the Windows PowerShell script that runs this wizard and performs the conversion. All administrative tasks in Virtual Machine Manager can be performed at the command line or scripted. For more information, see Using the Virtual Machine Manager Command Shell.
    3. Optionally, accept the default setting Automatically open the Jobs window to view the progress of this operation (or clear this option).
    4. Click Create to create the virtual machine.
  7. In Jobs view, monitor the progress of the new virtual machine creation job and confirm that the virtual machine is created successfully. If the job fails, read the error message at the bottom of the Jobs window for information about the cause of the failure and the recommended action to resolve the error.

Or, of course, you could script it with PowerShell. On the last page of the wizard is a button called "View Script". Press this button to see all the cmdlets that will run to convert your machine. Save this for your scripting efforts later. Here's an example output:

# ------------------------------------------------------------------------------

# Convert Physical Server Wizard Script

# ------------------------------------------------------------------------------

# Script generated on Thursday, August 23, 2007 4:27:46 PM by Virtual Machine Manager

# For additional help on cmdlet usage, type get-help <cmdlet name>

# ------------------------------------------------------------------------------

$Credential = get-credential

New-MachineConfig -VMMServer localhost -SourceComputerName "P2Vsource.contoso.com" -Credential $Credential -RunAsynchronously

$VMHost = Get-VMHost -VMMServer localhost | where {$_.Name -eq "vmmserver.contoso.com"}

$MachineConfig = Get-MachineConfig -VMMServer localhost | where {$_.Name -eq "P2VSource.contoso.com"}

New-P2V -VMMServer localhost -VMHost $VMHost -RunAsynchronously -JobGroup 5e47436e-9fd1-4e1a-8cd9-1c8050a16a15 -SourceNetworkConnectionID "00:08:47:B7:BE:37" -EthernetAddress "00:08:47:B7:BE:37" -EthernetAddressType Static -NoConnection -MachineConfig $MachineConfig

$VMHost = Get-VMHost -VMMServer localhost | where {$_.Name -eq "vmmserver.contoso.com"}

$MachineConfig = Get-MachineConfig -VMMServer localhost | where {$_.Name -eq "P2VSource.contoso.com"}

New-P2V -VMMServer localhost -VMHost $VMHost -RunAsynchronously -JobGroup 5e47436e-9fd1-4e1a-8cd9-1c8050a16a15 -SourceNetworkConnectionID "00:02:A5:45:4A:20" -EthernetAddress "00:02:A5:45:4A:20" -EthernetAddressType Static -NoConnection -MachineConfig $MachineConfig

$VMHost = Get-VMHost -VMMServer localhost | where {$_.Name -eq "vmmserver.contoso.com"}

$MachineConfig = Get-MachineConfig -VMMServer localhost | where {$_.Name -eq "P2VSource.contoso.com"}

New-P2V -VMMServer localhost -VMHost $VMHost -RunAsynchronously -JobGroup 5e47436e-9fd1-4e1a-8cd9-1c8050a16a15 -VolumeDeviceID "C" -Dynamic -IDE -Bus 0 -Lun 0 -MachineConfig $MachineConfig

$Credential = get-credential

$VMHost = Get-VMHost -VMMServer localhost | where {$_.Name -eq "vmmserver.contoso.com"}

$MachineConfig = Get-MachineConfig -VMMServer localhost | where {$_.Name -eq "P2VSource.contoso.com"}

New-P2V -Credential $Credential -VMMServer localhost -VMHost $VMHost -Path "D:\Documents and Settings\All Users\Documents\Shared Virtual Machines\" -Owner "contoso\tonyso" -RunAsynchronously -JobGroup 5e47436e-9fd1-4e1a-8cd9-1c8050a16a15 -Trigger -Name "P2VSource" -MachineConfig $MachineConfig -RunAsSystem -UseHardwareAssistedVirtualization $false -StopAction SaveVM

*Please* leave a comment on this blog post if the above is not one of the coolest things you have seen out of Microsoft enterprise IT products in a long time... 

Finally - a requirement for P2V is a host on which to deploy the new VM, VS R2 SP1 or later.