How can I migrate a Windows 7 system image into a VirtualBox VM?

I have a Windows 7 system image (as in Microsoft's built-in backup, not dd or Norton Ghost). Can I convert it into a VirtualBox image? I'm aware that you can do this with dd images.

Even if I'm able to convert the image, will it break? The VirtualBox wiki suggested that I need to run MergeIDE before taking the system image, which I didn't do, and now I've already uninstalled Windows. So will I need to reinstall it and make a proper backup?

Update:

Okay, I have created a write-through virtual disk backed by the physical disk that contains my WindowsImageBackup. If I add that vmdk to my VM then it can see the backup! However, a new problem.

"No disk that can be used for recovering the system disk can be found," error code 0x80042412. But it can see the system disk, diskpart says it's online at SATA port 0. And I haven't selected it for exclusion. It just seems not to be able to read the disk.

Update 2:

After some searching I believe the new error is due to the fact that my virtual drive is smaller than the drive that was imaged (even though the actual space used was much less, the drive itself was large). I don't have enough room on any of my drives to accommodate a 1TB virtual disk, so I guess I'm stuck.

FYI for future readers of this post: I think this would have worked if I had enough HDD space. At the least, it should be possible to restore an image into a virtual disk. But it's still unknown whether Windows would boot without the registry changes made by MergeIDE.

Have you tried the Sysinternals (Microsoft) Disk2Vhd utility? It'll create a VHD with which Virtualbox is compatible. You'll then need to import this as a disk and create the Virtualbox VM itself to configure the settings.