In one sentence "Use LSI Logic as the SCSI controller in the virtual machine settings"
When installing RedHat Linux 5 as a guest OS in VMware server, I kept getting a "no drives found" error in anaconda.
Someone suggested I use the LSI logic driver, I mistakenly thought that meant a driver disk (dd.img), but that was not the case.
The driver for the hard drive is specified when you are defining the virtual machine. Select Custom on the first page of the New Virtual Machine Wizard. Then Linux as the Guest Operating System.