The following has be reported by IBM LTC:  
RHEL3 AS Beta2 does not install on VMWare 4.0 SCSI disk
Hardware Environment:
Installing on VMWare 4.0

Software Environment:
RHEL3 AS Beta 2

Steps to Reproduce:
1.Install from CD
2.
3.

Actual Results:
When I tried to install on a VMWare virtual machine with a virtual SCSI drive,
I got to the window about installing other drivers and I could not get past this
menu.  It did not seem to properly detect the disk drive and did not provide
an appropriate disk driver to install.  

Expected Results:
Simple installation where I could just take the provided defaults.

Additional Information:

The installation succeeded when I changed my virtual machine to have an IDE
drive.  I have been able to install RHAS 2.1 on a virtual machine with the
SCSI drive.

While VMWare is not a likely platform for production use of Advanced Server,
we do use it extensively for initial development because of the ease of creating
a VM and installing rather than having to setup an entire new PC.Glen/Greg -
please submit this to Red Hat.  Thanks.