I had this problem too, found the solution:
http://ubuntuforums.org/showthread.php?t=1674759
"enabling Paravirtualization in the VM's setting (under the 'Options' tab) did the trick for me. I don't know if this has always been disabled or the upgrade to VMWare 4.10 disables it, which is quite likely given that the information on the properties page for this setting tells us that the next version of VMWare won't have paravirtualization and my Ubuntu VM used to work before our VMWare infrastructure was upgraded to 4.10."
"I've found another work around that works for me: In the vSphere manager, shutdown the virtual machine and edit it settings: go to the Options tab, and select "CPU/MMU Virtualization". There, change the selected option from "Automatic" (the first) to "Use Intel VT-x/AMD-V for instruction set virtualization and software for MMU virtualization" (the third). After that, I can boot with any 2.6.32-3x kernel."
