I have been dealing with this for the past couple of weeks. Turns out that several people at work have also been seeing it with the same configuration.
Leopard 10.5.1
VMWare 1.1
Ubuntu 7.10
As soon as there is any heavy amount of Disk I/O under Linux (doing a compile, or large svn checkout), the VM hangs. The process under MacOS is unkillable, and I have to force shutdown my Mac Book Pro (it will never reboot on it's own, sits spinning forever). When I get the Linux system back up and running the entire filesystem is corrupted, most times beyond repair.
We have tried using/not-using VMWare Tools -- doesn't have any effect. No other odd settings are performed beyond the Create New Virtual Machine wizard.
Is this a known issue to VMWare? None of us had any problems with 1.0 on Tiger, so I suspect it is either 1.1 or Leopard that is giving us the troubles.
thanks,
chris