I'm Guessing it has something to do with the xorg packages. I don't know exactly WHY this fixed my issue, but on Aug 28th, 2010 a set of package updates came out that (see below), after installation, magically resolved this issue. How do you configure vmware-tools for VMware Player 3.0.1 in Ubuntu 10.04 64-bit to enable automatic guest resizing? Update When I resize or maximize the VMware Player window, the guest OS size stays fixed. Manually creating entries in nf for the host's fullscreen resolution.Updating all installed Ubuntu packages, including kernel (and then re-install vmware-tools).Updating to the latest patch level of VMware player 3.0.1.When installing vmware-tools in 10.04, I notice a lot of LSB warnings for upstart jobs that were not thrown when installing it in 9.10. However, the mouse and network drivers do continue to operate properly. Once I upgraded to Ubuntu 10.04 (not reinstalled), automatic resizing no longer works. Originally the VM was created with Ubuntu 9.10 64-bit and with vmware-tools installed, when I resized or maximized the VMware Player, the guest OS was correctly and automatically resized.

I'm running Ubuntu as a guest OS in a VM.

Vmware player windows 7 32 bit