The hgfs service failed to start due to the following error:
The system cannot find the file specified.
Try this simple command from a command prompt to fix it:
sc delete hgfs
The problem seems to be that a default install of VMware tools installs shared folders, which is not valid in VMware Server. You need to do a custom install and deselect this. I’ve been mainly upgrading VMware tools in VMware Workstation VM’s that I’ve migrated to VMware Server, so I’m not sure if this happens with a fresh install.