I am having the exact same problem. TS will run perfectly for up to a few minutes and then major lag sets in and when I try to quit it all dies.
This is my PC specs.
Windows 7 Home Premium Service Pack 1 32-bit
Intel Core 2 duo P9300 2.26GHz
4.00 GB Ram
NVIDIA GeForce G105M
Bios Version: 70.18.27.0.3
Dedicated Video Memory: 512 MB
Shared System Memory: 1263 MB
Drivers are up to date.
160GB SSD
VMware Player 4.0.1 build-528992
Running in Windows 98 compatibility. Using original TS game disks. Have tried dedicating 512, 1024 and 2048MB of ram to VMware and I get the same results.
I have also turned off DirectDraw and installed the removed DX9 components.
This problems happens to me running the original TS resolutions as well as when I modify the Sun.ini file.
I'm at the point where I am either going to update to Windows 7 Pro so I can use Virtual PC or simply buy an older PC and see if I have any luck there.
If anybody has any fresh ideas I am all ears! =]