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Finally figured out how to move the characters.

3 Folders in my root C folder: Wiz1 Wiz2 and WizCopy
Folder Wiz1 has the original Wiz1 .dsk file in it, but it is renamed to Wiz2.dsk
Folder Wiz2 has all the files for Wizardry 2
FolderWizCopy has a copy of the Wizardry 2 wiz2.dsk in it

Start game normally
Goto Edge of Town
Goto Utilities
Goto Move Characters

To enter your Source Disk (Wiz1.dsk)
Open the Command Prompt
Navigate to the folder Wiz 1
At the prompt type copy wiz2.dsk c:\wiz2
Press Enter
Press Enter on the Wizardry 2 game - it will copy the characters

It will then prompt you to enter your source disk.
Open the Command Prompt
Navigate to the folder WizCopy
At the prompt type copy wiz2.dsk c:\wiz2
Press Enter
Press Enter on the Wizardry 2 game - it will copy the characters

It will then prompt you to enter your source disk.
Press Enter - IT will give you an error about not really being the source disk.
Click the X and close to program.
Restart the program and shazam the characters are there.

Have fun!!!