OK, I just did the same thing using VMPlayer version 6 on a Windows 7 box. That was even easier, since running liloconfig during setup doesn't fail.
So, I did the complete install and used the "simple" selection when asked if I wanted to install lilo during setup. I took all the defaults when asked anything about lilo.
After I exited setup, I ran the commands...
Code:
mount -R /proc /mnt/proc
mount -R /sys /mnt/sys
mount -R /dev /mnt/dev
chroot /mnt
$(/usr/share/mkinitrd/mkinitrd_command_generator.sh -r)
/usr/share/mkinitrd/mkinitrd_command_generator.sh -l /boot/vmlinuz-generic-3.10.17 >>/etc/lilo.conf
lilo -v
exit
...followed by ctrl-alt-delete sent to the vm. On reboot, I selected the 3.10.17 lilo label and the system booted without a hitch.