Mouse is captured in VMware and not able to seamlessly go-in/out
It looks like xserver-xorg-input-vmmouse needed to be installed before installing VMware Tools.
Installed xserver-xorg-input-vmmouse to install it as well as mdetect.
# apt-get install xserver-xorg-input-vmmouse
1:12.5.1-4ubuntu5
(06/19/2009)