I am trying to run CentOS 5.3-x86_64 in a Vmware Fusion virtual
machine on my Mac Pri (10.5.6)

My install starts OK, checks media and then I get a message saying

We regularly ( dozen odd times in a day ) run c5 installer in vm's under
fusion - but only running http/pxe installs. So its reasonable to assume
the installer does work. I am guessing ( as Phil already pointed out )
that its a media connection issue.

Yup, exactly what it was. When I reached that box, I simply re-connected the .iso and it worked fine. Weird how it got disconnected when it was in use though...

Thanks!

-Jason