Boot VL in vmware and enter the bios, set it to boot from CD, and then you should be able to continue your installation. I believe that VMware is set to boot from CD the first time only, and then defaults to your (virtual) hard drive (which, at this point, isn't ready to boot).
Other tips for using VL in Vmware are to skip the video (X) setup. Once installation is done, boot to TUI (text user interface) mode, and (as root) replace the exisiting xorg.conf with the exisiting xorg.conf-vesa. Reboot and GUI mode should work fine.
Hope this helps!