VMware Tools are fully compatible with Ubuntu 10.04. Before you continue, make sure that you are using the latest version of your VMware software product. If this is not the case, upgrade to the latest version, because you need the newest version of VMware Tools.
First attach the ISO image containing VMware Tools to the virtual machine. Then open a terminal window and execute the following commands:
sudo apt-get update && apt-get upgrade
sudo mount /dev/cdrom /media/cdrom
cp /media/cdrom/VMware*.tar.gz /tmp
sudo umount /media/cdrom
tar xzvf VMware*.gz
When the installation scripts promps for answers, just hit Enter since defaults are OK.
Source from here