No. Do not install workstation/vm-server/player and/or converter onto the same OS that vmware virtual center is installed too. If you want to run converter from the same machine, use the virtual center plugin associated to VC 2.5.x
If you do install the "standalone" version of converter (www.vmware.com/downloads/converter) onto the same install as VC, specific .dll files will be overwritten that can be problematic to the functionality of VC templates.
I have found these steps to work but you would be much better off opening a service request ticket and working with a technical support representative who is proficient with VirtualCenter.
Resolution:
1. On the VirtualCenter Server open a file browser to the following directory: C:\Program Files\Common Files\VMware\VMware Virtual Image Editing
2. Right click the properties of vmount2.exe and click the version tab to review the version of vmount (for example: 3.1.0.36983) and compare it with your current VirtualCenter version. This should match the version of VirtualCenter you are running for example VirtrtualCenter 2.0.2 build 50618 should show something similar to the following: 2.2.3.50618. If the build number differs (the last 5 digits of the file version), than you are not running the proper version of vmount.
3. Open the Windows Services manager and make sure that the 'VMware Virtual Mount Manager Extended' Service is stopped
4. Remove all the files in the VMware Virtual Image Editing folder. Note: If the files are locked, you may need to reboot the VirtualCenter Server to remove the lock.
5. Run a repair install of the current VirtualCenter to have the proper files replaced in the folder. Note: You can also install a fresh build of VirtualCenter on another system and copy the files over to here, or simply extract the following files from the vpx.cab from the installation media:
libeay32.dll
msvcp71.dll
msvcr71.dll
ssleay32.dll
vielib.dll
vmount2.exe
vmxScsiLib.dll
vstor2.sys
6. Try deploying the Virtual Machine with customization again and it should complete successfully.
