! SOLVED !
I figured this out with the help of a friend. It does work without too much work.
Here is how we did it.
1) Make sure the vm created in Fusion 5.0.3. is off.
2) Start Converter as administrator. (ie. right-click/ctrl-click & open/start)
3) Don't worry that it Converter doesn't identify the right Linux distribution.
4) When you set Destination Location make sure you you chose Virtual Machine Version 8. (Apparently Fusion only does version 8)
5) On the option Data to Copy and set Disk Type to THIN
6) Make sure you select the option not to automatically start the VM after transfer because you have to manually change some options.
7) Click Finish and let the job complete.
8) After successful migration, go to vSphere and edit the settings to make sure the OS Type & version is correct etc. etc.
9) Boot up the VM.