Same problem for me.

Ubuntu 8.04 up-to-date
VMWare Server 1.0.5 build-80187
No compiz.

To quote kk "Selecting default layout in 'System -> Settings -> Keyboard and 
select layout' does NOT solve the problem."
However, setxkbmap works for me.

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Shift key (and caps lock) stop working when using VMWare
https://bugs.launchpad.net/bugs/195982
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