I work in an Active Directory environment where many registry settings and services are controlled by group policy.

When I first installed VMWare 2 it didn't work at all, the service couldn't start and was very close to a cartoon moment of red-faced, steam-ejecting-ears fury.  It mentioned something about requiring the Protected Storage service, so I went and had a look, and, sure enough, group policy in my environment (over which I have no control, grrr!!!) has it disabled by default.

Enable protected storage, start the service, and then start the VMWare host agent - and all will be well.

Interestingly enough, over night it typically gets reset again, and both services stop again - however it doesn't affect the running of the machine - only logging into the management interface.