Mirroring and Shared Folders not working after upgrading to VMware Fusion 4

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Context

I upgraded to VMware Fusion 4, and/or upgraded VMware Tools in my VM, and find that mirroring of host machine folders, as well as shared folders on the host machine, are no longer working.

Solution

Step One - Upgrade your VM for compatibility with VMware Fusion 4

After upgrading to VMware Fusion 4, you will be prompted to choose to upgrade your Virtual Machine for compatibility with VMware Fusion 4. Choose OK to allow the upgrade.

If you answered "No" to that dialog, follow these steps to manually upgrade the VM to be fully compatible with VMware Fusion 4:

1. Power off the Virtual Machine.
   Note: Do not close or suspend the VM in a powered on state. From within the VM, follow the menu path Start > Shut Down.
2. Within VMware, follow the menu path Window > Virtual Machine Library
3. Highlight the Windows 7 VM.
4. Follow the menu path Virtual Machine > Settings
5. Select Compatibility
6. Select Compatible with VMware Fusion 4 or higher (Recommended)
7. Press Close.
8. Select the white triangle to resume the Virtual Machine.
   Result: The VM boots into Windows 7.

Step Two - Verify successful installation of VMware Tools

In some cases, after upgrading the VM for compatibility with VMware Fusion 4 and/or after upgrading VMware Tools for the VM, additional steps are needed for a successful VMware Tools installation. VMware Tools is software that runs inside the Virtual Machine, and is needed for mirroring and shared folders.

1. From the Virtual Machines menu, verify that Install VMware Tools is greyed out. If Install VMware Tools is not greyed out, select Install VMware Tools.
   When the installation is complete, reboot Windows as prompted.
2. Follow the menu path Virtual Machine > Sharing > Sharing Settings
3. Verify that Shared Folders in On and that Desktop and Documents are selected for Mirroring.
4. Log off and log back in as prompted.