When I tried to install the Windows Home Server 2008 (Windows Server 2003 based) on my VMware workstation 7.1 recently, I had several issues. So, here is a memo to fix those:
Use IDE I/F when creating a virtual disk for the primary disk.
Also it need to be at least 80GB.
After the first step installation from DVD, it is going to reboot and resuming the installation from a disk.
However, at that point, it requires VMware's SCSI disk driver, even though the DVD is using IDE I/F.
So, make sure to attach a driver floppy image "vmscsi-220.127.116.11.flp", and hit "F6" to load that driver.
Using the VMware SCSI Disk Driver for Windows Guest Operating Systems
SCSI Disk Drivers for VMware Server, Workstation or ACE