That fixed my mouse grab/ungrab!
The vmmouse driver for X11 was missing on my CentOS 6.2 install. I did a clean install direct from the source OS on the site followed by a yum install of the Gnome desktop environ. That is not part of the kit, or at least it wasn't in the release I had originally installed NOR was it included in the CentOS 6.3 release I am on now (forgot I updated trying to fix this problem last month).
[lcleveland@cent6 ~]$ cat /etc/redhat-release
CentOS release 6.3 (Final)
[lcleveland@cent6 ~]$ uname -a
Linux cent6.charlestonsw.com 2.6.32-279.19.1.el6.x86_64 #1 SMP Wed Dec 19 07:05:20 UTC 2012 x86_64 x86_64 x86_64 GNU/Linux
May be something to put in the vmware-install perl script to check for that and install it (or tell people to do so).
Thanks Darius!
PS - The driver install also fixed the copy/paste between guest & host. No idea why mouse drivers would impact THAT but it did.