I recently upgraded to Vsphere an began upgrading VMware tools. I had a problem on a Windows 2008 VM, that would not install the new version of VMware tools. I could not uninstall the old version either. I found this solution.
1) Switch to the CD-ROM with the VMware Tools ISO mounted.
2) Run setup.exe /c to do a manually removal of the registry keys from the previous VMware Tools version
3) Re-run the setup.
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