OK, I figured I should give an update on this in case anyone actually uses 3D max in VMware Fusion.
I upgraded to WIndows 7 and VMware Fusion 3.1.1. (My mac specs are posted earlier in this thread. I'm still on OSX 10.5)
I had been using XP 64-bit for the past two years. I couldn't use DirectX and had to use OpenGL though. but besides that it was smooth. I was reluctant to upgrade becauseof past experiences and what I've read on here.
I had emailed VMware's support and suggested they could come by my
office and see my setup considering I'm right next door to their office.
A product developer was interested to see 3d max's performance in the Virtual environemnt and stopped by on his lunch. This was hellpful and informative. One thing I took away from the meet n greet was that whether I was using DirectX or OpenGL in 3dmax had little or no effect on performance.
Anyways, windows 7 was glitchy as hell. we switched the windows theme to basic. Otherwise 3d max was super slow. But it seems to be ok except for the odd screen refresh glitch here and there.