i am also having this problem after upgrading to  hardy - note lack of
shift key and hence capitals as the bug has hit. running vmware player
2.0.3 causes the problem. no problem inside a vm, but no alt, shift or
control outside. can't run a terminal as this crashes as soon as
keyboard is pressed.

i am suspicious of the clipboard. clipboard use seems to bring on the
bug and there are some strange effects in the vm. ms office 9under
winxp0 seems to lose the ability to copy formatted data. its all
unformatted until the office clipboard is opened. will now try with the
vm isolated and see if the problem still arises.

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Shift key (and caps lock) stop working when using VMWare
https://bugs.launchpad.net/bugs/195982
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