I am also seeing this issue in VMware Fusion 3.1.2 on a MacBook Pro,
using the 11.04 i386 Beta1 DVD image, in a text-mode installation.

The installation appears to "hang" almost immediately after text-mode
installation is selected.

The installation screen will appear and installation can be continued
using the methods already suggested (removing 'vga=788' from the boot
command line, or loading vesafb from a shell enabled by the BOOT_DEBUG=3
option) or by blindly switching to a second virtual console and enabling
vesafb there (see below.)

If one selects a command-line-only text-mode installation (by selecting
text-mode installation, then F4 and the command-line option), and
completing the installation using one of these workarounds (selecting
default options to the extent possible), then when the installed VM is
booted, no text is shown until fn-ctrl-alt-F1 is pressed.

Details:

VMware host:
- VMware Fusion 3.1.2 (current version)
- Late 2006 MacBook Pro host (model A1212)
- T7600 Core 2 Duo CPU
- ATI Mobility Radeon X1600
- 3 GB SDRAM
- Using Ubuntu disk image: ubuntu-10.10-dvd-i386.iso

To duplicate:
- In VMware Fusion 3.1.2, create a new virtual machine using the default 
settings and specifying the beta1 ISO as the OS image.  Uncheck "Easy Install" 
if that option is presented.
- Start the virtual machine and observe that the installer presents the initial 
installation menu correctly.
- Select the text-mode installation option, hit return to start the 
installation.
- Observe the display resize and then hang.  Sometimes the installation menu 
remains displayed (also resized) and sometimes only a single underscore is 
displayed at the top-left corner.
- To recover the display and continue the installation, after the "hang", 
blindly press fn-ctrl-alt-F2, hit return, and type 'modprobe vesafb'.  The 
virtual console will appear; press fn-ctrl-alt-F1 to return to the installation 
console (thanks for the tips above.)

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https://bugs.launchpad.net/bugs/745947

Title:
  Fails to display video after grub (kernel lacks video output)

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