Many things can come to play, major ones are:
1. Windows does not report memory usage for kernel processes directly. Some of memory used for VMs is allocated at kernel level.
2. VMware does more sophisticated memory mamagement by default. But you can disable those optimizations for better overall performance.
My host performance is under where I would like it to be as I am running VMWare on a primary domain controller (which I realize isn't recommended but this is in a lab environment). How can I disable some of the memory management optimizations?
For VMware Server 1.x they were:
C:\Documents and Settings\All Users\Application Data\VMware\VMware Server\config.ini
prefvmx.useRecommendedLockedMemSize = "TRUE"
prefvmx.minVmMemPct = "100"
guest ".vmx" file:
sched.mem.pshare.enable = "FALSE"
mainMem.useNamedFile = "FALSE"
MemTrimRate = "0"
MemAllowAutoScaleDown = "FALSE"