Microsoft SysInternals has a utility, Disk2Vhd, which will do this for you. You can run this on a live machine, and it can create a VHD file to an external location, such as a network drive. You can then copy this VHD to where it needs to live on the Hyper-V host, and create a new VM guest using that file.
Disk2Vhd works great as a one-off tool (you may have to do some manual fixup to the HAL to get it to boot after converting the physical server to a VHD). If you are looking to do this in an enterprise environment (perhaps P2V-ing and managing multiple virtual servers) you would want to take a look at System Center Virtual Machine Manager 2008 R2 (that's a mouthful!)
Microsoft SysInternals has a utility, Disk2Vhd, which will do this for you. You can run this on a live machine, and it can create a VHD file to an external location, such as a network drive. You can then copy this VHD to where it needs to live on the Hyper-V host, and create a new VM guest using that file.
http://technet.microsoft.com/en-us/sysinternals/ee656415.aspx
Disk2Vhd works great as a one-off tool (you may have to do some manual fixup to the HAL to get it to boot after converting the physical server to a VHD). If you are looking to do this in an enterprise environment (perhaps P2V-ing and managing multiple virtual servers) you would want to take a look at System Center Virtual Machine Manager 2008 R2 (that's a mouthful!)
Tried disk2vhd, v2+ and ran into the 7b BSOD crashing. Found Xenconvert was much simpler: http://www.citrix.com/go/products/xenserver/xenserver-xenconvert-free.html#top
Still have to reactivate windows though.