1: You may have 384Mb of physical RAM in your system, but you need to explicitely tell VMWare how much you want to use, otherwise it'll just take a peek at your system and come up with a value that it thinks is OK. You'll need to go into Settings-->Memory.
3. Again, go into Settings and find out what CDs you have enabled. You have the option of CDRom/CDRom Image/CDRom Raw Access. Check that /dev/cdrom is the real device, and if it's not (symlinks are not considered as real devices), then give it the real address (/dev/scd0 or /dev/hdx). If you're going to be using the same CD all the time, you should consider making an ISO image (you can do so with dd) and making VMWare look at the image file instead of having the physical CD present all the time!