Here's the log from my vmware-tools install

Stopping VMware Tools services in the virtual machine:
Guest operating system daemon:-ne done

Guest memory manager:-ne done

• Deconfiguring network interfaces... OK

Guest vmxnet fast network device:-ne done

Trying to find a suitable vmmemctl module for your running kernel.

None of the pre-built vmmemctl modules for VMware Tools is suitable for your
running kernel. Do you want this program to try to build the vmmemctl module
for your system (you need to have a C compiler installed on your system)?
yes
Using compiler "/usr/bin/gcc". Use environment variable CC to override.

What is the location of the directory of C header files that match your running
kernel? [/lib/modules/2.6.22-14-server/build/include]
Extracting the sources of the vmmemctl module.

Building the vmmemctl module.

Using 2.6.x kernel build system.
make: Entering directory `/tmp/vmware-config0/vmmemctl-only'
make -C /lib/modules/2.6.22-14-server/build/include/.. SUBDIRS=$PWD SRCROOT=$PWD/. modules
make[1]: Entering directory `/usr/src/linux-headers-2.6.22-14-server'
CC [M] /tmp/vmware-config0/vmmemctl-only/os.o
SHIPPED /tmp/vmware-config0/vmmemctl-only/vmmemctl1.o
LD [M] /tmp/vmware-config0/vmmemctl-only/vmmemctl.o
Building modules, stage 2.
MODPOST 1 modules
WARNING: could not find /tmp/vmware-config0/vmmemctl-only/.vmmemctl1.o.cmd for /tmp/vmware-config0/vmmemctl-only/vmmemctl1.o
CC /tmp/vmware-config0/vmmemctl-only/vmmemctl.mod.o
LD [M] /tmp/vmware-config0/vmmemctl-only/vmmemctl.ko
make[1]: Leaving directory `/usr/src/linux-headers-2.6.22-14-server'
cp -f vmmemctl.ko ./../vmmemctl.o
make: Leaving directory `/tmp/vmware-config0/vmmemctl-only'
The module loads perfectly in the running kernel.

Extracting the sources of the vmhgfs module.

Building the vmhgfs module.

Using 2.6.x kernel build system.
make: Entering directory `/tmp/vmware-config0/vmhgfs-only'
make -C /lib/modules/2.6.22-14-server/build/include/.. SUBDIRS=$PWD SRCROOT=$PWD/. modules
make[1]: Entering directory `/usr/src/linux-headers-2.6.22-14-server'
CC [M] /tmp/vmware-config0/vmhgfs-only/cpName.o
CC [M] /tmp/vmware-config0/vmhgfs-only/cpNameLinux.o
CC [M] /tmp/vmware-config0/vmhgfs-only/dev.o
CC [M] /tmp/vmware-config0/vmhgfs-only/driver.o
CC [M] /tmp/vmware-config0/vmhgfs-only/hgfsUtil.o
CC [M] /tmp/vmware-config0/vmhgfs-only/main.o
CC [M] /tmp/vmware-config0/vmhgfs-only/staticEscape.o
LD [M] /tmp/vmware-config0/vmhgfs-only/vmhgfs.o
Building modules, stage 2.
MODPOST 1 modules
CC /tmp/vmware-config0/vmhgfs-only/vmhgfs.mod.o
LD [M] /tmp/vmware-config0/vmhgfs-only/vmhgfs.ko
make[1]: Leaving directory `/usr/src/linux-headers-2.6.22-14-server'
cp -f vmhgfs.ko ./../vmhgfs.o
make: Leaving directory `/tmp/vmware-config0/vmhgfs-only'
The module loads perfectly in the running kernel.

pcnet32 34820 0
Unloading pcnet32 module

Extracting the sources of the vmxnet module.

Building the vmxnet module.

Using 2.6.x kernel build system.
make: Entering directory `/tmp/vmware-config0/vmxnet-only'
make -C /lib/modules/2.6.22-14-server/build/include/.. SUBDIRS=$PWD SRCROOT=$PWD/. modules
make[1]: Entering directory `/usr/src/linux-headers-2.6.22-14-server'
CC [M] /tmp/vmware-config0/vmxnet-only/vmxnet.o
/tmp/vmware-config0/vmxnet-only/vmxnet.c: In function ‘vmxnet_open’:
/tmp/vmware-config0/vmxnet-only/vmxnet.c:816: warning: ‘deprecated_irq_flag’ is deprecated (declared at include/linux/interrupt.h:66)
Building modules, stage 2.
MODPOST 1 modules
CC /tmp/vmware-config0/vmxnet-only/vmxnet.mod.o
LD [M] /tmp/vmware-config0/vmxnet-only/vmxnet.ko
make[1]: Leaving directory `/usr/src/linux-headers-2.6.22-14-server'
cp -f vmxnet.ko ./../vmxnet.o
make: Leaving directory `/tmp/vmware-config0/vmxnet-only'
The module loads perfectly in the running kernel.

No X install found.

Starting VMware Tools services in the virtual machine:
Switching to guest configuration:-ne done

Guest memory manager:-ne done

Guest vmxnet fast network device:-ne done

DMA setup:-ne done

Guest operating system daemon:-ne done

The configuration of VMware Tools 3.0.2 build-52542 for Linux for this running
kernel completed successfully.

You must restart your X session before any mouse or graphics changes take
effect.

You can now run VMware Tools by invoking the following command:
"/usr/bin/vmware-toolbox" during an X server session.

To use the vmxnet driver, restart networking using the following commands:
/etc/init.d/networking stop
rmmod pcnet32
rmmod vmxnet
modprobe vmxnet
/etc/init.d/networking start

If you wish to configure any experimental features, please run the following
command: "vmware-config-tools.pl --experimental".

Enjoy,

--the VMware team

I've got the same issue with Feisty Server 7.04 which IS supported as per the supported guest OS guide. I've got a case with VMware support but we're just sitting tight waiting at the moment. If anyone has any insights I'd be really interested.

Perhaps it's got to do with the hardware it's running on: Dell PowerEdge 1850... I doubt it however.

Ahhh!

in Ubuntu 7.04 (feisty) this information is in /etc/iftab - I think you might have to just update the MAC address with the new one from the .vmx file

In Ubuntu 7.10 (gutsy) the file is /etc/udev/rules.d/70-persistent-net.rules - You need to remove the first line which has the old MAC address and eth0 then rename the eth1 to eth0 in the new line. The line looks something like:

# PCI device 0x1022:0x2000 (pcnet32)
SUBSYSTEM=="net", DRIVERS=="?*", ATTRS{address}=="00:xx:xx:xx:xx:xx", NAME="eth0"