Thanks for the reply;
As per the OP, using AirParrot, it works - but that is NOT a solution as I am running 10.8.
I am wondering if this is some sort of glitch or error or a feature that VMware is missing. The mirror option does not display in the toolbar, nor in the system settings - ie. OSX does not think that the machine supports it. Which is incorrect as the machine that the VM is built on is a brand new 2013 MBP.
Mirroring from iTunes work - but not desktop mirroring...
So yes, I think this is a VMWare support issue - I have 10.8, but as a VM, it is not enabling all the options natively available.
Any ideas to why this is not working ?