It seem that some of the newer Linux kernel versions (2.6.21 and 2.6.22) don’t like the LSI SCSI adapter emulation in some of VMware’s products. I myself ran into this when I upgraded the kernel on a Gentoo VM (VMware ESX Server 3.0.1) to 2.6.22. After rebooting, the system could not find the root partition.
It took a bit of searching to figure out what the problem was, but the solution was simple. Change the VM to use the BusLogic SCSI adapter instead of the LSI.