If I execute the ovftool by itself it replies:
Error: No source or target specified. Try 'ovftool --help' for more options.
Completed with errors
So executing ovftool --help the top part of the output states:
Usage: ovftool [options] <source> [<target>]
where
<source>: Source URL locator to an OVF package, VMX file, or virtual machine in
vCenter or on ESX Server.
<target>: Destination URL locator which specifies either a file location, or a
location in the vCenter inventory or on an ESX Server.
If <target> is not specified, information about the source is displayed to the
console.
The bottom part of the output states:
For more help, type: --help <topic>, where topics are:
locators : For detailed source and destination locator syntax
examples : For examples of use
config : For syntax of configuration files
integration : For a list of options primarily used when ovftool is exec'ed
from another tool or shellscript.
So executing it ovftool --help examples the following example shown is applicable:
ovftool /vms/my_vm.vmx /ovfs/my_vapp.ovf
(.vmx file to .ovf file. Result is put in /ovfs/my_vapp.[ovf|vmdk])
So as you can see you need to point to the .vmx configuration file not the .vmwarevm Virtual Machine Package.
FusionH3 wrote: XP.vmwarevm is a single file VM (the vmdk is built-in)
By default the .vmwarevm extension is hidden and is a Virtual Machine Package which is really nothing more then a folder, not an individual file, and because it's registered with OS X Launch Services it's treated differently then a folder without the extension.
Have a look at 
Work with Virtual Machine Packages and then use the FQPN (Fully Qualified Path Name) to the .vmx configuration file for the <source>.
As an example here is the FQCL (Fully Qualified Command Line) on my system to create an .ovf file and the resulting output.
Computer:~ WKZ$ /Applications/VMware\ Fusion.app/Contents/Library/VMware\ OVF\ Tool/ovftool /Users/WKZ/Documents/Virtual\ Machines.localized/Windows\ XP\ Professional.vmwarevm/Windows\ XP\ Professional.vmx /Users/WKZ/Documents/Virtual\ Machines.localized/WinXP\ OVF/WinXP.ovf
Opening VMX source: /Users/WKZ/Documents/Virtual Machines.localized/Windows XP Professional.vmwarevm/Windows XP Professional.vmx
Opening OVF target: /Users/WKZ/Documents/Virtual Machines.localized/WinXP OVF/WinXP.ovf
Writing OVF package: /Users/WKZ/Documents/Virtual Machines.localized/WinXP OVF/WinXP.ovf
Transfer Completed
Completed successfully
Computer:~ WKZ$
Looking in the "WinXP OVF" folder there are now three files, WinXP-disk1.vmdk, WinXP.mf and WinXP.ovf.
That about covers it! 