After converting a SBS 2008 server from physical to Virtual with Backup Exec System Recovery sysprep hangs

Today I had to take a customers server that was running SBS 2008 on a physical box and convert it to a virtual machine as we were preparing to run a terminal server along side the SBS server on one physical box. This particular customer uses Symantec’s Backup Exec System Recovery 2010, soon to be renamed Symantec System Recovery 2011. I did my usual full backup and verification, then reformatted the server with Windows 2008 R2. I installed the Hyper Visor role, and installed BESR. I then selected the backup of the SBS server and selected to convert it to a Virtual Machine. During the selection, I selected to run Mini Setup