If a VPS was created manually via the Command Line like below:
vzctl create <CTID> --ostemplate .centos-5-x86
and if that VPS is not registered in OA, should I use the
convert_vps_to_host.py script to add it as a Hardware Node?
No, in that situation the script should not be used. Container should be added as a Hardware Node using the following instructions: http://download.pa.parallels.com/poa/5.5/doc/65356.htm