I have exactly the same problem. I am currently dual-booting windows xp and redhat 9 on my system, but thought I would try out this vmware workstation to see if i could install redhat 9 there, so I could easily switch between winxp and rh9. The install of rh9 on vmware went flawlessly, but when I start the rh9 virtual drive, it hangs up on "updating etc/fstab".
I have no problems when I boot into rh9 normally (close winxp, restart computer, choose rh9).
I previously tried to run suse 9.2 pro on this vmware. Again, the install went great, but when it came time to startup the suse 9.2 virtual drive, it hung during the boot process, only with the suse, it said something about the cylinder being too large or too small something.
After getting that, I removed the suse and created a new vm for rh9.
So far, all I can say is that I am NOT impressed with this vmware