The only legitimate commercial tool that does native VMDK→ISO is (paid) or UltraISO (paid trial – limited to 300MB). The "BEST" free solution is always the two-step approach described above.
Furthermore, users should remember that converting a bootable VMDK to a bootable ISO is complex. Simply changing the container format doesn't always preserve the boot sector; additional tools like
Converting a VMDK (virtual disk) directly to an ISO (optical disc image) is a common request for users wanting to create bootable media from a virtual machine. While they are fundamentally different formats—VMDK represents a hard drive, while ISO represents a CD/DVD—several free tools and workflows can bridge this gap.