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Resolved via KB article from VMware: http://kb.vmware.com/selfservice/microsites/search.do?language=en_US&cmd=displayKC&externalId=2038

This issue can occur if the Microsoft XML Parser msxmlx.inf files have been corrupted by some activity on your host, like a failed or incomplete product installation, or a system crash. Most commonly, this activity changed the msxmlx.inf files to read-only.
To confirm this is your problem:

1.Open the Windows Search utility. (Choose Start > Search > For Files or Folders.)
2.Search for vmmsi.log.
3.Open the log with a text editor and look for the following message:
Error: 'msxmlx.inf' with error code 1
To fix the problem, search for all occurrances of the file msxmlx.inf on your system, and change the properties on the files from read-only wherever necessary:

1.Open the Windows Search utility. (Choose Start > Search > For Files or Folders.)
2.Search for msxmlx.inf. Important: Make sure you include hidden files.
3.For each file that appears in the Results pane:
a.Right-click the file to access the drop-down menu.
b.Choose Properties.
c.Deselect Read-only if it is already selected.
4.Try installing Workstation again.
If this procedure does not solve the problem, try updating the Microsoft XML Parser. You can download the parser from www.microsoft.com/downloads. Reboot your host after this upgrade, then try installing Workstation again.
Some customers have found that deleting the msxmlx.inf files or renaming them has solved the problem as well. VMware doesn't recommend this solution, however, because other programs that depend on these files may no longer work.