A while back I created a note about how to fix the slow mouse issue that sometimes happens even after installing VMware tools on a Server 2008 guest. The process is as follows:
1. Make sure VMware tools is up to date
2. You may need to update the VM hardware versions if this fix does not work.
3. On the guest, open up the device manager and expand the Display adapters.
4. Right click on Standard VGA Graphics Adapter and select Properties
5. Click the Driver tab.
6. Click the Update Driver button
7. Select Let me pick from a list of device drivers on my computer
8. Click have Disk… button
9. Click browse and go to:
C:Program FilesCommon FilesVMwareDriverswddm_video
10. Select vm3d and click open.
11. Click OK on the Install From Disk window
12. VMware SVGA 3D (Microsoft Corporation – WDDM) should be selected
13. Click Next and then Close
14. A reboot is required so select Yes.
15. You may also need to adjust your display acceleration to “full”.