Hello Paola
For sure you can not convert a PV machine, i.e. even if the conversion passes, it will not boot in ESX.
As for the reconfig error - the log bundle could provide some more info. Perhaps there is something specific in this source.
As a workaround I'd recommend you boot the converted VM from a live CD (e.g. RHEL 5.8 installation) and perform mkinitrd manually. This should be enough unless this is a UEFI machine. If it is, you should additionally create an EFI boot entry.
HTH
Plamen