You'll have conflicts on the network for awhile once you stand the VM up with the same ip address, computer name, and sql server instance name.
Once you shut down the old physical machine, everything in your applications will work just fine.
If you use remote connectivity to your sql server, you'll need to make sure any linked server entries are correct and that you've named the sql server instance the same as the other physical box.
Just finished doing exactly what you are up to... :)