Upgrading the Virtual Machine Version from 7 to 10 fixes this for me on
all my VMs.

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https://bugs.launchpad.net/bugs/1328898

Title:
  VMware guest video broken by the 3.2.0.64 kernel update

Status in “xserver-xorg-video-vmware” package in Ubuntu:
  Confirmed

Bug description:
  See detailed discussion here on the VMWare board:
  https://communities.vmware.com/message/2388776

  I can confirm that downgrading to 3.2.0.63 works, and booting into
  3.2.0.64 causes the "split screen" issue.

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