Microsoft has identified this as an issue with certain Windows operating systems. This issue does not specifically pertain to VMware Converter, and it can be seen in other types of cloning software.
Windows operating systems contain entries in the registry and certain configuration files that identify where the operating system was originally installed. Drive letters in Windows operating systems are based on Globally Unique Identifiers (GUID) for each volume. If the volume GUID of the boot drive is modified, it can prevent Windows from logging in to the desktop.
When a drive is resized during a conversion with VMware Converter, the resulting volume may have a different GUID. Windows tracks drive letter assignments by the GUID, and if this has changed it re-enumerates the drive letters. This can cause the system volume to become C:\, even if it was previously a different letter.
This can occur when the source system is converted with VMware Converter and when the Windows operating system is installed on another drive besides the default of C:\ (such as D:\). This issue also frequently occurs when the source server hosts Citrix Presentation Server software. This is not an issue with Citrix, but is due to the way the Windows operating system is installed in that environment.