Hmm, Your vmware tools should install. I think I had the same problem once and had to reboot the vm to get it to install, anyway...
Here, try these.
VMware Video Drivers
I modified the inf for a resolution of 1024x768x32. VMware tells you that in order to have a display res higer than 640x480, you have to install the drivers but then it defaults to 640x480 anyway.
[vmx_svga_SoftwareDeviceSettings]
HKR, , InstalledDisplayDrivers, %REG_MULTI_SZ%, vmx_fb
HKR, , VgaCompatible, %REG_DWORD%, 0
HKR, , DefaultSettings.XResolution, %REG_DWORD%, 1024
HKR, , DefaultSettings.YResolution, %REG_DWORD%, 768
HKR, , DefaultSettings.BitsPerPel, %REG_DWORD%, 32
That's what I changed...