Accepted Solutions
WoodyZ,
Thank you for that suggestion, the host internet is running at a desirable performance. The main improvement I observed was minimal packet loss when pinging google.com. It used to be about 30-50% when the usb network adapter was connected to the guest, now it has been consistently 0% packet loss when bridged from the host.
I've run into 2 minor problems with your approach:
1. I'm guessing by default, VM Workstation changes the adapter settings in this configuration. In network adapter bridged to the guest, Internet Connection Sharing was activated, which caused any packets transmitted to the guest to be re-routed through the host before going to the router. This was easily addressed by going to Network Connections->Properties (bridged adapter)->Sharing, and disabling sharing. After this, internet speeds on the host nearly doubled.
2. In order to maintain exclusivity each network adapter on host and guest, you suggested I uncheck all all the items under Networking except VMware Bridge Protocol. This resulted no internet access to either the host or the guest. It makes sense that TCP/IPv4 protocol remain enabled for internet access. But, even with just VMware Bridge and IPv4 protocols enabled, the host is still able to access the internet through this adapter. I tried changing the priority of network adapters in Network Connections->(alt)Advanced->Advanced Settings, but it seems Windows still wants to use the adapter with the higher signal, which happens to be WORK 
If anyone knows how to configure a network adapter to work exclusively in Workstation when bridging an internet connection connected to the host, your help is greatly appreciated. Or, how to prioritize network adapters in Win7.
Also WoodyZ, thanks for the info on Win7 SP1. I've been looking more into it and it seems SP1 has many serious issues in addition to incompatibilities with Workstation. I'll be updating my Workstation and saving my Win7 update until some kind of SP1 revision.
It is clear from your attached picture that having only VMware Bridge Protocol enabled on NIC2 that your host has internet connectivity. I can't seem to find any difference between our two configurations with the exception of my prioritizing NICs. When I tried leaving only VMware Bridge Protocol enabled, the host Win7 machine shows limited connectivity to the network and the guest has no connectivity. Every other detail shown in your attached picture is identical to my configuration.
Maybe the discrepency lies in your using wired NICs while I'm using wireless NICs. Or perhaps there was some setting I've modified and am overlooking.
Some how I just knew you were going to say that so here is what I did. I dug up an old Belkin Wireless G USB Network Adapter and downloaded the Drivers for Windows 7 x64 and installed it on the Host while keeping the default setting during the install. This of course means until I modify its Properties the Host will have Internet/Network Connectivity to the WiFi Network as well and this while ultimately not wanted nonetheless I what to make sure both the Host and the Guest have Internet/Network Connectivity on the WiF Network before modify the Host's WiFi Adapters Properties. I then changed VMnet2 in the Virtual Network Editor to use the Belkin Wireless G USB Network Adapter. Next I temporarily disabled the Host's Wired Network Adapters to test the WiFi so I then joined the WiFi Network from the Windows 7 x64 Host and made sure it had Internet/Network Connectivity, and it did. Next I started VMware Workstation 7.1.3 and booted the Linux Virtual Machine and confirmed it too had Internet/Network Connectivity, and it did.
At this point both the Host and the Guest have received valid IP Addresses however of course they are on the same Subnet and we want to isolate the Host from the Subnet the WiFi Network Adapter is connected to as well as the Virtual Machine so at this point with the exception of VMware Bridge Protocol I unchecked all other check boxes on the Networking tab of the Wireless Network Connection Properties dialog box.
I of course no longer had Internet/Network Connectivity on the Host via the WiFi Network Adapter at this point so next I checked to see if the Guest still had Internet/Network Connectivity and like you I too did not.
This is not the case on my Windows XP Host however you're using a Windows 7 Host so the only relevance is my state of mind in the original reply regarding this as a solution. So now what changes need to be made to allow the Guest to have connectivity yet keep the Host off of the WiFi's Subnet.
After a very brief moment of thought about how to only enable one item in the list to give connectivity to the Guest while keeping the Host isolated from the WiFi's Subnet I did the following.
On the Networking tab of the Wireless Network Connection Properties dialog box in addition to the already, and at this point only, checked VMware Bridge Protocol I also checked the Internet Protocol Version 4 (TCP/IPv4) check box and then clicked the properties button to disable DHCP and isolate the the Host by using the following settings:
IP address: 169.254.1.1
Subnet mask: 255.255.0.0
Default gateway: [Left Blank]
Preferred DNS server: 192.168.2.1
Alternate DNS server: [Left Blank]
At this point the Guest has Internet/Network Connectivity and the Host does not as it is not able to communicate with the Guest or the WiFi Subnet the Guest is on as the Guest is using 192.168.2.157/24 with a Default Gateway and Preferred DNS Server using 192.168.2.1. This was the minimum amount of setting changes to enable the Guest to have Internet/Network Connectivity while depriving the Host access to the WiFi's Subnet and Guest.
Next I enabled one of the Host's Wired Ethernet Adapters and it is configured via DHCP with the following relevant information:
IP address: 172.16.36.139
Subnet mask: 255.255.255.0
Default gateway: 172.16.36.1
Preferred DNS server: 172.16.36.1
Now both the Host and the Guest have Internet/Network Connectivity separate and apart from each other on separate Subnets and cannot directly communicate with each other. So within this use case scenario this I believe achieves your goal does it not? 
Consider this, since I am running this on a laptop, even though I don't really take it around with me much, if in the case I do require my laptop to connect to a foreign network, would the preset ip/dns server addresses restrict my internet connectivity?
Yes most certainly as that was the purpose with that particular configuration.
If that is the case, would unchecking the VMware Bridge Protocol for the host nic maintain isolation in the same way?
The only thing unchecking the VMware Bridge Protocol will do by itself will stop the Guest from using a Bridged connection on that Interface.
Because of work I routinely have to be on different Networks on a regular basis much less when I travel and while there are programs available to control multiple configurations for a given Network Adapter to cover this very scenario nonetheless I have been using my own scripts to manage all the different Networks that require different settings when not using DHCP. As an example in my office the Notebook is explicitly configured with static information and once I leave the office the next stop may require being on a different Subnet, etc., whether statically assign or using DHCP in either case a couple of mouse clicks and the rest is automated via scripting. Quick, easy, effective and most of all free and not having had to pay for a program that does the same thing.
I really do want to learn more about virtualization and networking to find ways to use this configuration to its potential, could you recommend any reference material or websites to help me get started?
As I look to my bookshelves where there are literally a couple hundred books covering Computer Hardware, Software and IT Specialties and where there may be a half of dozen to a dozen for each language I used to program in or usually no less then three or four books on each given specific area or as an example sets of books used for different MCSE certifications or even just a program like Adobe Photoshop if there is one thing I found out early on is that there is no one book that covers any given area completely. Also because of the writers style one will find one authors book on the same subject covering exactly the same topics easier or harder to comprehend compared to another. Which in some cases is why I have more then a single copy on a even given subject that I've purchased. Now to the long drawn out point... If there is one thing I've found better then the books I've read, and nowadays in many ways more practical, is the power of Google and having learned how to search the Internet effectively and is a skill may Users haven't mastered.
So, having been a veracious reader over the years and Google is my Home Page for a good reason, so my best suggestion is just read everything you can whether it be books or on the Internet, it's all out there.