- Network Drivers - The E1000 driver is alledged to be responsible for server lock up. Once you have created your initial VM, remove the standard E1000 interface that is added by default, and add a new network interface with a vmxnet 3 driver. Now the OS will not have a driver for this, so you will have to install vmware tools before you start doing any network activity. If you are building from PXE you will need to import the vmxnet drivers into your OS building applciation.
- Video Drivers - This is the reason the console will lock up, but only after you have installed vmware tools. When installing vmware tools, do a custom installation. Expand the drivers section and change the video driver option to "This option is unavailable." Continuing without this driver will not affect your experience in the slightest.
Other than this, 2008 R2 virtual machines run well in vSphere 4.