Well, as time permits I have been slowly upgrading my VMs to the latest virtual hardware. When I started this process, it was before VMware instituted a warning within the Upgrade Virtual Hardware that you first need to upgrade VMware Tools. This problem bit me twice and it was enough that I put in my own policy to always upgrade VMware Tools BEFORE upgrading the Virtual Hardware.
When you play around with Windows 2008 R2, if you do not properly upgrade VMware Tools before a Virtual Hardware Upgrade your VM will spin out of control sucking up CPU until you kill it. Which you have to do, in order to fix the issue. A reboot will fix the issue, but then you must upgrade VMware Tools before anything else happens. I suggest using Safe-Mode.
In one of the updates VMware kindly introduced a warning box when you upgrade Virtual Hardware to let you know that you need to update VMware Tools first. If you do not install VMware Tools due to security concerns, you may want to not upgrade your virtual hardware. I have not tried removing the tools after Virtual Hardware Upgrade, which may be another option.