So I have successfully upgraded my Windows 7 Pro X64 - Virtual Machine to Windows 10 Pro. It runs great. Please note that I am using the VMware Technology Preview however I am sure it will run on VMware 7 as well.
For those that have the Windows 10 upgrade icon in the system tray but are having trouble due to the Windows 10 Compatibility appraiser indicating that the VMware SVGA 3D driver is incompatible skip directly to Part B. For those that are not even seeing the upgrade icon follow Part A instructions followed by Part B.
1) Make sure you have KB3035583 is installed. If you already see the Windows 10 upgrade icon in your system tray then you do. If you don't see the icon verify that the update is installed by going to Windows Update -> Installed Updates.
3) Open regedit.exe and go to HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Windows NT\CurrentVersion\AppCompatFlags\UpgradeExperienceIndicators and make sure the string values UpgEx and UpgExU exist there and are set to Green. If not, create the string values UpgEx and UpgExU and enter Green as the value.
4) Repeat the same for HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Windows NT\CurrentVersion\AppCompatFlags\UpgradeExperienceIndicators\Reduced and make sure both UpgEx and UpgExU show Green there.
5) Reboot. Now the Get Windows 10 Upgrade Icon should show up in the system tray, however do not click on it yet.
1) Before you click the Get Windows 10 Upgrade Icon, open the file C:\Windows\AppCompat\Appraiser\Telemetry\Appraiser.JSON in Notepad.exe
2) Delete the contents and replace with the following:
"JsonSuccessfullyWritten" : true,
"JsonVersion" : 3,
"JsonCreationTime" : "130800491614668440",
"CompatSectionCount" : 0,
3) Save the file
4) Now click on the Get Windows 10 Upgrade Icon, you should now be able to reserve your free Windows 10 upgrade and continue with the download and installation. You will not be told that the SVGA driver is incompatible anymore. Upgrade will be smooth. Reinstall VMware tools after upgrade is complete.