Centos Firstboot - No Way Out

So I continued following the advice in CentOS 6 Linux Server Cookbook.
I installed firstboot.
    yum -y install firstboot
    chkconfig firstboot on
One is supposed to be able to navigate using arrow keys.
That worked until this screen:

But suddenly, the tab keys worked! Now I can leave.
Never mind.

Trying to set up new CentOS 6.5 from Skytap Template

OK, figured how to log in from Settings / Credentials - Default password comes with the template.
Using CentOS 6 Linux Server Cookbook from www.safaribooksonline.com.

1st I used the directions from https://help.skytap.com/vmware-tools-linux.html to install VMWare tools.
I had to do a "mkdir /media/cdrom" since /media was there, but not /media/cdrom.
After that, the mount command and the rest of the instructions worked.

Then, following the Cookbook, I did

yum -y update

This took a while. It looked like a lot of packages were updating.

Then I got the error message:

kernel panic not able to mount root fs on unknown block(0,0)

I tried rebooting and got a message about operation failed because VMWare Tools are still loading:

There are other options:

I don't have much to lose, so I try Reset. But I get the same message about VMWare Tools still loading. So I click the Power off button...

It is now Powered Off.

I click the Run button... 

I open the VM:

Hmm.

Well, I can delete the VM and start again.

Or give up on creating my own, and just copy a more set-up VM from a co-worker.

Oh well.

5 minutes later:  OK, but, WhatifItry:

1) Create a new VM from Template

2) Don't add CPU, disk space, memory, like I did before

3) Do the yum -y update BEFORE trying to install the VMWare tools.

---

Here we go again:

...

It rebooted, and let me log in.

Should I install VMWare tools now?