I recently had trouble getting guest OS networking setup on a Windows XP SP3 VM running on a Windows 7 RC host system using VMware Workstation 6.5.2 build-156735. Here are the steps I took to get this working:
1. Shut down the VM and edit the *.vmx file to include this line:
ethernet0.virtualDev = “e1000”
(suggested here: http://blog.tiensivu.com/aaron/archives/1771-Windows-7-and-VMWare-Workstation-6.5.1-still-have-networking-issues.html)
2. Power the VM back on.
3. Download the driver pack that includes the e1000 driver to the Windows 7 host system:
4. Map a shared folder into the VM and copy the Intel installer over. Install the driver pack and let XP setup the “new” network connection.
5. Switch the vNIC to Bridged Networking mode, and renew your DHCP address.
This still does not seem to get networking working with a NAT connection, but a Bridged connection will work for me in the meantime.