Ok I figured it out. Remember the goal is to move a raw disk partition/vmdk containing Windows XP from one physical hard disk to another. I needed the hard disk where the raw partition was located.
I used the procedure documented here:
refer to section 3. Instead of using VDI's, I used VMDK's.
I did this twice. The first time it froze about 5 or 10 minutes into the Windows repair procedure. I booted back into the source VMDK and removed the VBox Guest Additions. Then I was successful. When I got to about the same place where it froze the last time, XP prompted me for a disk with the driver VBoxGuest.sys. I mounted the Guest additions and the repair continued to a successful conclusion.
Downside: VBox will not boot the new VMDK without help. I mount a grub floppy image and I boot the new partition with that.
Can anyone help me fix this last part?