I still believe the wording and working of GPO and device driver updates is broken. But I also believe I have a fix for this particular situation. I want to thank the 'continuum' on the VMWare Workstation communities site for this solution. The solution is to edit the vmx file and add/edit the line: vmci0.present = "false"
For some reason all my guests were set to true even when the VMWare Tools installs would indicate otherwise.