I have a possible workaround for this problem.

I still experienced the problem with the latest Ubuntu kernel (as of 20060724). 
In looking around I found this solution:
http://www.vmware.com/community/thread.jspa?messageID=321981&#321981

Basically, the performance problems stem from ACPI bugs that set the kernel 
into the wrong "cstate". So, I did this:
echo 1 > /sys/module/processor/parameters/max_cstate

My performance problems were then solved (at least until a reboot).

Hope this helps until a official fix comes out.

-- 
kernel can't scale cpu frequency
https://launchpad.net/bugs/36014

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