install WinXP natively under Bootcamp and move everything from the virtual machine (under Fusion) to this new Windows partition
After you've created the new BC partition, let Fusion use that partition as a new VM. In that VM, mount the old VMDK as a second HD, and transfer as desired.
open fusion in mac os x and it will automatically detect your boot camp partition and set it up to be run virtually
Once the XP BC is running as a VM, you can add the old VMDK as a second hard drive in that VM
Transfering applications never is, because there are executables, setup files, and Windows registry entries.
using a mirroring/ghosting utility, like Acronis True Image or Migrate Easy.
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