I've tried this on VMWare Workstation 5.5.2 with Ubuntu 6.10 and the problem still exists. However this seems to only be a graphic glitz since pressing Enter correctly reboots the system (as Matthew Garrett suspected)
-- VMWare Server Post-Install Reboot Fails https://launchpad.net/bugs/61195 -- ubuntu-bugs mailing list ubuntu-bugs@lists.ubuntu.com https://lists.ubuntu.com/mailman/listinfo/ubuntu-bugs