In the past, there has been debate over whether to use Domain-based or host-based time synchronisation for VM guests running Windows. Microsoft and VMWare guidance didn’t seem to agree. It seems that Microsoft has finally directed administrators to the VMWare KB – see links below.
The summary of the articles is that when running a Windows guest within a VMWare virtual machine, disable W32Time – the built in Windows time synchronisation. Instead, use the VMWare Tools option to sync the guest’s time to the host machine. The VMWare host server must be set to synchronise with an NTP time source to ensure accurate time is maintained.
The following two articles cover the recommended configuration:
Time Synchronization issue in Windows Server 2003 systems running as VMware Guests
VMware Time Sync and Windows Time Service
A VMWare ESX 3.5 host can now be configured for NTP time sync using the VIClient 2.5 GUI (and configuring the time source automatically opens the NTP Client ports in the ESX firewall).
The Infrastructure Guy 