I'm speaking from Fusion experience, but expect it to largely be the same in Workstation.
vmware tools seem to be working since I can move the mouse in & out of the vm/guest without doing a ctl-alt
On some guests, especially more modern ones, this isn't a good indicator that Tools is running - some configurations will have this behavior without installing Tools. A better test would be something like drag-and-drop or a HGFS shared folder.
Did you have Tools configured in Fusion? If so, did you try just running the virtual machine without attempting to reinstall Tools?
