If you follow the forums, you'll find consistent advice against converting physical machines because they result in a bloated buggy and unstable VM. Since you have to purchase a retail windows license anyway (the OEM licenses that come with machines can't be virtualized), it's not that much work to create a clean VM from scratch.
Do NOT ever give all the Mac cores to the guest. For Win7, there's no point in giving it more than 2 cores unless you're doing some heavy duty lifting.