This is happening for me as well.  I'm running Ubuntu Hardy Heron with
the proprietary ATI drivers for a Radeon 1600 (fglrx), and XP SP3 as the
guest.  The entire system freezes permanently, I have never experienced
a temporary freeze.  When the system is frozen I cannot ping the host or
the guest, and cannot SSH to the host.

This has happened with the screensaver running as well as when the
display is sleeping.  I am fairly sure, however, that I had the VM
running every time.

Most of the time after I reset the box, the entire display is shifted to
the right a few inches (a large black vertical bar on the left side, the
display trailing off te monitor on the right side).  A reboot after
fully logging in has generally fixed this.

I'm unable to locate any record of the issue in my logs.

-- 
X freezes running vmware (server and workstation) when using network
https://bugs.launchpad.net/bugs/117219
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