Finally, I am confident to say now - I can do it!
First, to google this topic, use keyword P2V (Physical-to-Virtual).
Second, for windows XP operation system to work with VMWare's tools, it is required to have a VOL winxp license. VMware does have many Semi-automated P2V tools. I tried and always got errors. I did P2V manually.
Third, laptops, even a 8-year old one, are using SCSI hard drives (even not really SCSI hard drives, the motherboard using adapter to fake a IDE hard drive to SCSI). So, choose the virtual machine hard drive as SCSI to start with. (The new VMWare Fusion "smartly" picked IDE hard drive for me after I indicated the virtual system is winxp. But this how-to only works for SCSI.) I remember the old days, it was pain to install windows or redhat to my Acer Travelmate 350 - because of this SCSI driver issue.
Why P2V? I have many computers, some are old and not used frequently. There are times I want to access them. With the power of newer machines, I can easily run the old computer system as a virtual machine inside the newer one.
The old system was in sda mode and I ran as hda - not working.
Even I set it as sda, there is no SCSI driver built in for windows xp to recognize the file system. (Initially, I thought it was not the hard drive formating issue, because if I entered the windows Safe Mode, I saw hal.dll ... files were being loaded before blue screen occurred. But, after many trials including replacing hal.dll files in the partition using a virtual machine version, I realized that it is the right direction. At that time, I was not using the correct keyword either. Then I saw RTFM's educational guide and things started working ...)
* I directly ghost back the partition image to the virtual machine, NOT the peer-to-peer mode described in the pdf, which requires network support and another computer running VMWare server. When I had my virtual hard drive set as IDE disk, I had to use image-to-disk mode. Later, I realized the SCSI issue. I just directly partition-to-partition ghosted. It might be possible to do image-to-parition on the SCSI disk directly.
* BartPE disc was only used to fix-scsi. I did not enable the network support (I failed to do so - error said that there is no network card found). I have my ghost image in a USB drive.
* I injected Qui Hong's Fix-VMSCSI.
* All the resources on RTFM is old, but WORKING.
* Chris and Mike suggest to do
1. Switch over to vmxnet
2. Install VMware Tools
3. Configure a static IP address
4. Remove Stale Software
5. Remote Stale Hardware
6. Change the ACPI Settings as appropriate – downgrade/upgrade ACPI and HAL.DLL appropriate to Uni-Processor or Multi-Processor VM
I don't know how to and got nothing via google. I end up do nothing. If these reconfiguration were done, I might not need to boot the system with BartPE disc.
OK. I can boot into the virtual machine now! Wait ...
... the keyboard and the mouse are not working!! @#$%&
Similar as the hard drive issue, the old system in virtual machine not only needs new SCSI driver, but also drivers for other things. Fortunately, I had the BartPE disc around, if I have it inserted while boot, the virtual system automatically extract missing drivers from BartPE.
Once I was in the system, install the VMWare Tools. My first P2V is done!