I'm using a 32-bit Windows XP SP3 VM, created with a slipstreamed SP3 installation CD under VMWare 2.0 beta 1 (now upgraded to beta 2), and I'm getting the instant reboots on my one month old 8-core Mac Pro running 10.5.4 patched up to date.
If I put the system to sleep with the VM running, waking from sleep goes almost immediately to a restart instead of resuming (after a few seconds delay with a blank screen, which is presumably while it's waking from sleep then triggering the restart). If I suspend the VM and put the Mac to sleep, it seems to wake from sleep correctly and operate normally, but when I later attempt to resume the VM, I immediately get a restart as mentioned above - no kernel panic, no diagnostic logs... just a sudden blank screen and reboot.
In both cases, after the reboot, the VM is in a "powered off" state, which suggests it did actually resume and change state before the host machine restarted.
I'm happy to run further tests if needed, as time permits.