I installed the 1.1.2 Fusion update and installed the VMware Tools on Windows Xp, RHEL5 and Ubuntu 7.10 (the latter using the 1.1.2 linux.iso file). Everything works perfectly in Windows Xp and Ubuntu 7.10, including sharing folders. Sharing folders is now broken in RHEL5. During boot time the screen shows:

Mounting HGFS Shares FAILED

If I look at the Settings - Shared folders, I see that it is checked on "Enabled at Power On" but UNCHECKED on "Enabled". If I try to CHECK the Enable checkbox and then apply, it automatically unchecks it, so there is no way to save the Enable state before starting the RHEL5 VM.

Notice that the same HGFS shares mount properly when starting up Ubuntu 7.10.

Any ideas on how to fix this?