Yesterday, in Spokane, I mentioned a tool that can be used to evaluate physical machines and help make determinations on what machines would be good candidates for virtualization. There are some reporting features built into System Center Virtualization Machine Manager to help make this determination. The downside you have to have SCVMM to get that tool.
There is also the Microsoft Assessment and Planning Tool which can also provide virtualization candidate reporting and is FREE to download. This tool does a lot more than just evaluate candidates though. It can be used for planning migrations to Vista and Office 2007and device inventory. Enjoy!