In vmware config wizard, it will prompt you whether you want to use an already installed OS (if I remember correctly).
But the things is that, the hardware presented by vmware to the guest OS is different from the one presented directly. That shouldn't be a problem for OS like WinNT/2k, linux, bsd etc. (video driver is going to be a problem tho), but it'll be a problem for Win9x/Me. For Win9x/Me, when you run in vmware, it will redetect everything. And when you switch it back to run it natively, it will redetect everything again, which can be very anoying.
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