This can be fixed by adding the following line in .vmx of the guest virtual machine.
References:
http://communities.vmware.com/message/978732?tstart=15
http://communities.vmware.com/message/905156#905156
~ts~
svga.enableOverlay = "FALSE"
References:
http://communities.vmware.com/message/978732?tstart=15
http://communities.vmware.com/message/905156#905156
~ts~
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