The virtual machine does not emulate the hardware you have on your system, it emulates its own specific set of hardware that it knows how to work with, and that includes a rather low-end video card apparently. There may be a way to change that, but I have never worked with VMWare, so I don't know.
You may be able to play the game full-screen, but this is not helpful if you want to actually edit games, since this error is the same when editing maps and playing games. If you want to try playing full-screen anyway, right-click on the project (top-level) object in the tree, select Edit, then change Windowed to false, and see if it runs.
Edit: After a cursory search on the web, it looks like VMWare doesn't support current versions DirectX generally, so there's little hope there.