From where did you get the .iso file? Have you tested that you can boot a physical machine from the same disc? A drag-and-drop copy of the files from a Windows disc onto a new disc will create a disc that offers to install/upgrade when inserted into an existing Windows system, but a system will not be able to boot up from that same disc... there is much more to a bootable disc that gets missed out by a drag-and-drop copy.
Otherwise, please collect the vmware.log from the virtual machine's directory, and attach it to a reply here. (Choose Use advanced editor when composing your reply, then attach the log file that way.)
Cheers,
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Darius