You should use the VMDK Image instead of the ISO image.
I can’t help you with getting VMWare to work for you, as I don’t use VMWare. There is meant to be a VMWare guide around but I can’t seem to find it. If you are willing to swap to Virtualbox, then there is a step by step guide for it: https://www.haiku-os.org/guides/virtualizing/virtualbox
1 Get an Haiku iso file on http://www.haiku-files.org (I choose the latest gcc4 hybrid)
2 Uncompress the archive wherever you want
3 Launch VMware Fusion, now every step will be done into VMWare
4 Create a new virtual machine (Menu File->New)
5 Click on “Continue without disc”
6 Click on the dropdown menu with “Choose a disc or disc image…”
7 Select the iso you have unompressed, then click “Continue”
8 Select “Other” for both “Operating System” and “Version” drop down menus
9 Click Finish
10 Give a name to your virtual machine
You can set a custom hard drive when the “Customize Settings” button is available
11 The virtual machine should now start Haiku from the ISO image you have downloaded
Haiku installation
12 Click “Run Installer”
13 Click “Continue”
14 Close the alert
15 Click on “Set up partitions…”
16 Click on the disc you want to format
17 You are now able to use the menu “Partition”->”Format”->”Be File System…”
18 Click on “Continue”, click on “Initialize”, “Write changes”, “OK”
19 You can close the DriveSetup window
20 Click on “Please choose target” and select the volume you have just formatted
21 Click “Begin”
22 Click on “Restart” and voila, welcome into the poetic world of Haiku
On my version I had an alert whenever restarting Haiku, click “OK” and everything will be fine.