Best Practice vs. Performance??? When restoring images to VMware Server, performance wise is it better to convert the .spi file using Vmware convertor and then bring up the image or is it better to create a virtual disk, boot to the shadow protect CD and restore the image?

The difference shouldn't be that noticeable, but the latter option can help avoid some minor limitations of the VMware convertor. Try both and use what you feel most comfortable with.