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I don't often install Ubuntu server on a Virtual Machine (VM) so I've documented the process here. Usually you can just click "install VMWare tools" and VMWare will complete the process automatically.

Note: I have tested this on VMWare workstation 7.0 and Ubuntu 9.10, 10.04, 10.10, 11.04 and 11.10 is also works on Lubuntu and Xubuntu. Once you have Ubuntu server installed run the following commands.

#Change to super user
sudo su

#Update your sources
apt-get update

#Upgrade your installed packages and force kernel upgrade
apt-get dist-upgrade

#  Now reboot

#back to super user
sudo su

#Install Build tools
apt-get install linux-headers-server build-essential

#  Now you are ready to install VMWare tools.

#Mount the VMWare Tools CD ISO (make sure you have told VMWare you want to install tools)
mkdir /mnt/cdrom 
mount /dev/cdrom /mnt/cdrom

#Copy VMware Tools
cp /mnt/cdrom/VMwareTools-x.x.x-xxxxx.tar.gz /tmp

#Go tmp
cd /tmp

tar -zxf VMwareTools-x.x.x-xxxxx.tar.gz

#Change to extracted directory
cd vmware-tools-distrib

#Start the installer
./ -d

The default settings have always worked for me (within a vm) so I use the -d option. If you need a different configuration don't use the -d.

Using Shared folders

After a reboot you can use tools such as Shared folders. I like to sym link my shared folders to my home directory as I tend to forget the mount directory (hgfs) location.

#sym link and name vmSharedFolder
ln -s /mnt/hgfs/ ~/vmSharedFolder

Please note that if you use VMWare work station you can find all this in the help. When I wrote this I was using player, which at the time didn't include this in the help.