I work in the Interactive Devices team at VMware, focusing on the virtualization of sound device. The company will be releasing VMware Workstation 7.0 tomorrow that includes the long overdue ALSA sound support for Linux host operating systems.
The Open Sound System (OSS) API used in earlier versions of workstation didn't support software mixing of sound streams and therefore the infamous "Sound will be disconnected. /dev/dsp is busy" message when powering on a VM. With ALSA support, the VMs and sound applications on host operating system can access the sound card simultaneously.
The technical details for configuring sound device in VMware Workstation 7 are documented here .
I encountered some inconsistencies while enumerating sound devices using ALSA. So if your system has multiple sound cards and your sound card isn't listed in the VM Settings UI then follow the instructions under "Using an ALSA Sound Device that Does Not Appear in Virtual Machine Settings".
Workstation for Linux also includes the ability to change the sound API used on-the-fly. For instance, if your physical machine has multiple sound cards, where one sound card is dedicated for VoIP and other for music applications, then you can direct sound output to desired device/interface by navigating in the UI to VM --> Settings --> Sound Card --> Specify host sound card --> Save.
In order to maintain backward compatibility if for any reason ALSA cannot be used then automatic fallback to OSS is provided.
For comments/feedback I can be reached at bbhavsar at vmware dot com
