Okay...updated, and it seems to be working!
First, had to delve into the settings a bit. I uploaded a RIP (rescue is possible) CD to the datastore along with one of our XP install disks.
Second, the bootup was impossibly fast. There's a setting to control that, and to control forcing it to go to the BIOS setup at boot, from the edit settings for the VM. Need that to change boot order to work with the CD before the hard disk.
Third, attach CD ROM image from datastore (RIP CD) to the CD drive.
Fourth, remember to "connect at startup" for the CD drive. Whoopsie.
That's how to get it to boot from another source. I booted RIP and had it run Testdisk, which did some repairs to the partition but it kept detecting that the number of heads was misset (I'd change it in the geometry menu but it just wasn't "saving" the new settings...haven't figured that one out.) Reboot, this time it got to the point where it would blue screen. Progress!
Next was a trip to Windows XP's bootable ISO and from there into the recovery console. I ran fixmbr, then fixboot, then chkdsk c: /p twice. Did a quick dir to see if files looked intact (like ntdetect and ntldr) and then exited, shut down the VM and removed the disc from the virtual drive (disconnect at powerup) and crossed fingers.
The VM booted up. YAY!
Thank you to all who offered suggestions!
Is there any reason why you must run Ubuntu 9.10 as the VMWare Server host OS?
I have been reliably running VMWare Server (1 & 2) with Ubuntu Server 8.04LTS for years.
It is supported by VMWare and installation is a lot simpler.
i.e. Install gcc and your kernel headers and you are good to go.
I have documented the few optimisations I put in place at the OS and VMWare level below. From experience I have found this results in more consistent performance across the VMs:
And here is a quick rundown on how to enable USB support on Ubuntu 8.04 with VMMWare Server 2:
p.s. I have setup hypervisors running Ubuntu 8.04 32bit and 64bit without any problems.
Best Answer
Server 2.0.2 sounds ancient to me, and hostd problems seem very common from a quick google... I would try setting up a small (workbench not production) ESXi 5 system on whatever usable hardware is at hand (modern PC should do, you might need to find a supported NIC) and importing the VM on that. You also have a current vmkfstools at your disposal this way...