VMWare have a new product in beta. VMWare's description of the tool is as follows:
VMware Converter is a highly robust and scalable enterprise-class migration tool that reduces the time that IT managers spend converting physical machines to VMware virtual machines. Using a snapshot based cloning mechanism that is extremely fast and reliable, VMware Converter enables remote conversions without disrupting the source server during the conversion process.
It looks like it has a hell of a lot of promise including hot cloning.
Find out more about this new offering here.