Hi - I also have exactly the same problem (Ubuntu 12.04, VMware Player, running on Windows 8.1 host). Unfortunately, I don't have a recent snapshot to go back to.

I have renamed the following file:  /usr/lib/xorg/modules/drivers/vmware_drv.so, followed by a reboot, and this makes the system just a little bit more useable - it seems to apply a basic screen driver in place of the correct one.  I now have a 800x600 screen with just one desktop, but can't increase the size at all.  The mouse inside the VM is also very sluggish.

The driver file that I renamed is dated May 18 2012, so I doubt that this file is the actual cause of the problem (even though the VM knowledgebase article seemed to suggest this was the problem).

I hope that there is a solution soon.  This is driving me nuts.