I agree with Dan -- e-smith is not what you want to use as the base for VMware. Use Mandrake or Red Hat, they have the packages and libraries you'll need whereas those have been stripped out of e-smith (unnecessary for the network server role it is designed to play.)
FYI -- I'm told the most recent Mandrake distros include Win4Lin, which is an excellent way to run a single Windows session under Linux. By all accounts it outperforms VMware for simply running Windows apps; however, VMware provides more control of the network and system environment. As one person put it, Win4Lin is for users who need/want access to Windows applications without needing to get at the guts of Windows itself, whereas VMware is for technical types who need full access to and control of the Windows internals. And, of course, VMware will also let you run Linux under NT/2K, though I don't know why you'd want to do that! I believe Win4Lin is also limited to Win9x apps -- no NT/2K.
Scott