When the System Administrator has set the 'Windows Software Restriction Policy' to disable. With other words the Windows Installer has been disabled.This will result in a an error when you try to install the VMware Tools.

The error is: The system administrator has set policies to prevent this installation

The solution is to enable the windows installer setting in the 'Windows Software Restriction Policy'.

• Start gpedit.msc (start --> Run)
• Browse to Local Computer Policy
• Select Computer Configuration
• Select Administrative Templates
• Select Windows Components
• Select Windows Installer
• Set the policy from Disabled to Enabled

Retry to install the VMware Tools. After succesfull install, set the policy back if needed.