It is probably not good form to ask why you want to run VMWare server on your SME server, but I will ask anyway: Why!?
I can understand wanting to put SME server in a VM, but not the other way around. Perhaps you could enlighten me as to why you would want to do it this way?
I run my SME server inside of a VM hosted on a sparse CentOS 5.2 installation. Other machines run in this host as well and it is quite efficient.
But as to VMWare Server v2, I don't like VMWare server 2... the UI doesn't let me use a VMWare server console and what is provided only works well with Windows or 32bit Linux... I run most of my Linux desktops in 64 bit and because their web client is Java based, they have effectively excluded all 64bit Linux users.