A virtual machine virtualized with VMWare Player on OS X can't be updated using the regular update method in OS X. This is the special set of instructions to update your vitual machine. The guide will be constantly updated to the latest version of OS X.
1. In Windows, download the 10.6.7 update from here: http://support.apple.com/kb/DL1361.
2. Also, download this new kernel: http://blog.nawcom.com/?p=640.
3. Now follow these instructions to update to OS X Snow Leopard 10.6.7. This software update is required for the SDK and can not be manually installed through the Apple updater in the OS.
Though the video shows the steps for 10.6.5, the steps are exactly the same.