To make sure we capture the most data we can about this system (and to demonstrate that it either is or is not the virtualization layer causing slowness) we've been tasked with copying the physical server into a similarly-configured virtual machine.
Unfortunately, VMware Converter apparently can't do Linux. So we had to use the more standard drive-image-transfer toolkit of dd and netcat. But even after the image was transferred, the kernel would crash because it couldn't find the root disk.
This is to be expected, but only Google knows how to solve it. If you know the right keywords. Good screenshots of the process are at http://virtualaleph.blogspot.com/2007/05/virtualize-linux-server-with-vmware.html but it's modprobe.conf not modules.conf in RHEL5.
So here's the steps I took:
Boot from the (correct) RHEL install CD #1 with "linux rescue". Note that it has to be the correct RHEL version and architecture. Since the appliance was running 5.2 x64 edition, my 5.1 x86 cd didn't work, and I had to download a different CD1.
Skip the networking config since it won't help, search for RHEL installations, and continue to the root shell (in read-write mode)
chroot /mnt/sysimage and edit /etc/modprobe.conf. Change the eth0 module alias to pcnet32 (you can remove the eth1 alias if you don't have a second nic in your VM) and change the scsi_hostadapter alias to BusLogic. (again, you can remove other aliases if you want)
Then copy /boot/initrd-
If that works, you should be able to boot the VM and have it come up cleanly.