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. Select the next few things according to your own specifications, then when you get to Select I/O Adapter Types, select "LSI Logic" for the SCSI adapter. Then you can select SCSI as the Virtual Disk Type in the subsequent tab.
This worked for me with RHEL4 and RHEL5 boot media. I was unable to boot with the default driver (BusLogic).