I experienced the same problem:

Fatal IO error 104 (Connection reset by peer) on X server

intermittently on Ubuntu 9.10 32-bit running as a guest machine on
VMware 7.0.1, w/tools 8.1.4 build-227600.  Adding:

Section "Device"
        Option      "HWcursor"           "false"
        Option      "SWcursor"           "true"
        Driver      "vmware"
        . . . 
EndSection
,
to /etc/X11/xorg.conf corrected the problem. I generated the base xorg.conf 
with Xorg -configure.

The problem, in this case anyway, isn't specific to Nvidia cards.

-- 
X crash on start (Xubuntu)
https://bugs.launchpad.net/bugs/460478
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