In general I found this guide useful.

Issue 1. “Unable to contact specified host”

This was caused due to having the Windows Firewall running on the Windows XP source computer.  Turning off Windows Firewall enabled VMWare vCenter Convertor to connect to the computer.

Issue 2. “Insufficient permissions to connect to <computername>”

This was caused by not having a password assigned to the Administrator account on the Windows XP machine.  It appears the VMWare vCenter Convertor cannot log into the remote Windows XP machine if the Administrator account doesn’t have a password.

Here are some tips I discovered while sorting this out.

• VMWare vCenter Convertor is trying to connect to ADMIN$ which is a special administrative share on the Windows XP machine.

• You can test your access to the ADMIN$ share on the Windows XP machine by opening a command prompt on your computer and using NET USE, for example NET USE \\192.168.0.0\ADMIN$.  It will then prompt you for the user name and password of the Windows XP machine.  Errors such as “System error 5 has occured. Access is denied” indicate that you are not using the correct username/password combination, or in my case that the Administrator account did not have a password set.

• The Administrator account is a special administrative account in Windows XP and is different from the other users accounts even if they have Administrator access.  I got help on this from here.

The built-in Administrator account is hidden from Welcome Screen when a user account with Administrator privileges exists and enabled. In Windows XP Home Edition, you can login as built-in Administrator in Safe Mode only. For XP Professional, press CTRL + ALT + DEL twice at the Welcome Screen and input your Administrator password in the classic logon window that appears.

• If you haven’t set a password then login by leaving the password field blank.

• After you’ve logged in as Administrator then set the password  for the account through Control Panel. Then you should be good to go.

Good Luck!