- Copy & paste did not work
- Drag & drop did not work
- Unity was not working
After following the advice in KB1014988 and KB1027884, the issues still persisted and I finally opened a ticket with VMware. After spending a couple of hours on a WebEx with VMware support, they finally discovered a solution. User Account Control (UAC) was preventing this functionality. After dropping it to "Never notify" and rebooting, Unity was enabled and I was able to copy & paste and drag & drop between the guest and host.
You can perform this fix by going to Control Panel > User Accounts > Change User Account Control settings and setting the slider bar to the bottom setting of Never notify. After updating this setting, reboot for the change to take effect.
After the issue was resolved, and I had a better idea as to what was causing the issue, I came across KB1019058 which addresses the issue of Unity and UAC. I was also informed that Windows Firewall could also cause issues with Unity, but that was not my case.
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