1) Create the basic VM structure using the following website: http://www.easyvmx.com/
Activate the "iso image" CDROM. It will be usefull latter. Set a name like cdrom.iso
Download the generated .zip and unpack it somewhere.

2) Download and install VMPlayer: http://www.vmware.com/download/player

3) Open the MachineName.vmx on VM Player. Install the guest OS using a CDROM. If you want to use a ISO file, create a symbolic link on the same folder with the name you choose on step 1 (cdrom.iso - you may need to activate it on the top of the VM screen, propably CDROM 1:1)

4) Download the VMWare Workstation package, to extract from it the VMWare tools install ISOs: http://www.vmware.com/download/ws/
Choose the .tar.gz dowload option.

5) Extract the ISO file corresponding to your guest OS from the Workstation package (the ISOs are on the folder /vmware-distrib/lib/isoimages/). Create (or replace) a symbolic link on the VM folder, with the name you choose on step 1 (cdrom.iso - you may need to activate it on the top of the VM screen, propably CDROM 1:1)

6) Install VMware tools on the Virtual Machine;

Optional: Activate 3D support on guest system:

Edit the .vmx file and add the following lines. You will need to install VMware tools on the guest OS:

mks.enable3d = "TRUE"
vmmouse.present = "FALSE"
svga.vramSize = "67108864"

IMPORTANT: Deactivate compiz before you start a VM that has 3D activated.

Workaround for keyboard problems on Xfree 7.3 host:

You will need to add some lines to ~/.vmware/preferences

The keycode (left number) for your keyboard you can get using the xev application. The virtual code number (right hexadecimal number) you can get from the internet (ex: http://www.vmware.com/support/ws55/doc/ws_devices_keymap_vscan.html). The numbers above where collected for an ABNT2 notebook keyboard.

xkeymap.keycode.108 = 0x138 # Alt_R
xkeymap.keycode.98 = 0x148 # Up
xkeymap.keycode.104 = 0x150 # Down
xkeymap.keycode.100 = 0x14b # Left
xkeymap.keycode.102 = 0x14d # Right
xkeymap.keycode.37 = 0x01d # Control_L
xkeymap.keycode.106 = 0x152 # Insert
xkeymap.keycode.107 = 0x153 # Delete
xkeymap.keycode.97 = 0x147 # Home
xkeymap.keycode.103 = 0x14f # End
xkeymap.keycode.99 = 0x149 # Prior
xkeymap.keycode.105 = 0x151 # Next
xkeymap.keycode.78 = 0x46 # Scroll_Lock
xkeymap.keycode.110 = 0x100 # Pause
xkeymap.keycode.133 = 0x15b # Meta_L
xkeymap.keycode.134 = 0x15c # Meta_R
xkeymap.keycode.117 = 0x15d # Menu
xkeymap.keycode.123 = 0x035 # /?
xkeymap.keycode.36 = 0x01c # Enter
xkeymap.keycode.22 = 0x00e # Backspace
xkeymap.keycode.50 = 0x02a # Shift_L
xkeymap.keycode.62 = 0x036 # Shift_R

Related bug on launchpad: https://bugs.launchpad.net/ubuntu/+source/xorg/+bug/195982

Adding ISO cdrom Image

Add the following lines to the .vmx file:

# Settings for the optional virtual CDROM, ISO-image
ide1:1.present = "TRUE"
ide1:1.fileName = "cdrom.iso"
ide1:1.deviceType = "cdrom-image"
ide1:1.mode = "persistent"
ide1:1.startConnected = "FALSE"

Fix network not working on Windows XP

Install VMware tools and set the network driver to vmxnet on the .vmx file:

ethernet0.virtualDev = "vmxnet"