So,
I finally gave up on this issue ... I've devoted over 140 hours of my time on this already.
I tried Parallels with the same VM images (it converted them) and did not get the 'freeze' issue - however they have a bug running full screen which is a show stopper for me.
I've taken a different approach:
1. Install Windows 7 under boot camp
2. Run VMware Player on the Windows 7 side, to run Windows XP, Debian Linux VM's
I've was able to run all the same VMware images with not too much work - I just let it re-install the VMware tools to the version VMware player wanted and I was good to go.
All working fine now, no crashes at all.
It's not the ideal solution, as I have to reboot to get my Mac Mail, and I can't run iTunes because I have used 5 instances up, and it counts Bootcamp as number 6.
The downtime has been a big issue for me, so my company are providing me with a laptop next week, so this will probably be my last update here.
