It is running in vmserver 2.0 the only options i have are "Take/revert to/remove snapshot"
"Remove Snapshot" will merge the snapshot data into the base disks and then delete the 00001.vmdk files. If you still prefer to convert the .vmdk files, you can use the vmware-vdiskmanager command line tool to convert the virtual disks into an ESXi compatible format. If you are going to do this, make sure you specify the snapshot .vmdk file as the source in the command line!
Unless you have the command line tool, you can download it from the attachments in http://kb.vmware.com/kb/1023856
André