hi---thanks for the suggestions. unfortunately, vmrun just starts the virtual machine in the same mouse-capturing OSX window. that sort of makes sense. it is a virtual machine that may want to talk to many devices, not just my console terminal.
what is really needed is a fusion option that states "the mouse does not belong to you". the vmware support folks told me that arch is not supported. end of story. they do not (yet) understand how to deal with command-line non-X based clients. it's a bit surprising, given vmware's server-farm heritage.
/iaw