This has been driving me NUTS for weeks. I've been using VMWare Server 2.x and having horrible disk performance. I couldn't find an answer until today and it's so simple:
Edit the .vmx file to have this line: mainMem.useNamedFile = FALSE
I came across the answer in this blog post, which references the thread here on the VMWare Communities to learn more about it. Truly life changing. I don't know what I'll do now with all the extra time in my life.
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