Mountain Lion is 10.8, not 10.4. If you really are running 10.4, that's why nothing is working.
The migration agent can't migrate an OSX machine to a virtual machine - that's the support it's talking about. But the converter is hit or miss - many windows machines have strange drivers and software that prevent it from working. The standalone vmware converter works better. But.....
Converting existing computers is not recommended. It results in a bloated, buggy, unstable virtual machine. Since you have to purchase a windows 7 retail license anyway (the OEM licenses that come with computers can't be virtualized legally), you're better off building a VM from scratch.
