Sorry, I got that a little wrong ...

VMWare presents a different hardware layer with "VMWare devices" to Windows (different disk drivers required etc) "VMWare tools" provides windows with the correct drivers to use the vmware devices - they wont work without "VMWare tools" being installed.

For example, Windows will not recognise the disk at boot time because VMWare provides a disk type which XP does not have native support for (SATA I think, I forget)

First off - I don't think it is possible - here is why.

I have done this with XP:
Setup:
Dual boot laptop with a XP installation and a Linux installation.
Boot into Linux, start vmware player, run the physical installation of XP as a VM.

To achieve this, I had to setup a 2nd hardware profile within XP.
The first hardware profile I named "Physical" - which is to be used when booting the laptop into XP
The 2nd profile I named "virtual" - to be used when booting within vmware. This hardware profile has VMWare tools installed.

VMWare tools presents a different hardware layer to Windows (different disk drivers required etc) - hence the requirement for 2 hardware profiles. It is my understanding that hardware profile support has been removed in Windows 7.

The other major hindrance I had was the type of M$ licence - I forget which one worked in the end (Volume licence rings a bell) but most licence types will fail "Windows Genuine Advantage" if the hardware changes too much (which it does when running M$ XP on top of vmware)

For these reasons, I keep XP on my laptop and happily boot Linux and run the XP physical installation as a VM.

If anyone can find a way to avoid the 1 (2) issues I mention, please share :)