You have to use the account 'administrator' By default this will not be enabled, you need to enable the account, and set a password for it. You can then login using these credentials. Once connected, you can add other local users for future access. Again, the account to be added must have a password set.
Thanks for the help Paul.
This didn't work for me. I'm running Windows 7 home and VMware Server 2. I enabled the Administrator account and set a password, but it won't log in. Help!