I haven't done too much investigation into how widespread this might be or if there is an issue for other versions of VMWare besides Workstation but I wanted to get the info out to the public about what I discovered this morning.

If you have a Windows XP guest in VMWare 9 (I have 9.01 exactly), then the VMWare tools for the guest will break Console One. I've been able to duplicate this on multiple guest VMs and it is the same result each time. I'm thinking that one of the new drivers is likely the culprit but again I haven't tested beyond making my own work.

The symptom of this was a grey C1 screen that never finishes loading. The window can be closed using the X in the corner. Any subsequent attempts to load the app until the next restart resulted in the display going all black around the grey C1 window with things being redrawn as you mouse over them.

I hope this saves someone some time banging their head against the wall!