VM Tools upgrade error "The feature you are trying to use is on a network resource that is unavailable"

Symptoms

Upgrading VMware Workstation fails with errors:

The feature you are trying to use is on a network resource that is unavailable. Click Ok to try again, or enter an alternative path to a folder containing the installation package 'tools-winpre2k.msi' in the box below.
The feature you are trying to use is on a network resource that is unavailable. Click Ok to try again, or enter an alternative path to a folder containing the installation package 'tools-freebsd.msi' in the box below.

Cause

This issue occurs because certain registry entries are left intact when previous version of VMware Workstation is uninstalled. Therefore, when attempting to upgrade Workstation, installer is unable to locate the files which are already removed.

Resolution

Note: Before proceeding with the steps, VMware recommends to create a restore point using System Restore tool which is inbuilt in Windows operating systems. The restore point contains information about the registry, you can use the restore point to undo changes to your system.

For more information, see:

For Windows 7-The Microsoft article Create a restore point
For Windows 8/ Windows 10-The Microsoft article Create a system restore point

Note: The preceding link was correct of April 26, 2016. If you find the link in broken provide a feedback and a VMware employee will update the link.

To resolve this issue, restore point or backup of registry:

Click Start > Run, type regedit, and click OK. The Registry Editor opens.
Navigate to this directory

HKEY_LOCAL_MACHINE\SOFTWARE\Classes\Installer\Products\
Within this folder, search ( Edit > Find ) for tools-winpre2k.msi and delete the folder that contains tools-winpre2k.msi as data value.

For Example:

In this case:

[HKEY_LOCAL_MACHINE\SOFTWARE\Classes\Installer\Products\7A26F0EA2A1AF704F9C48439B99DDAD8\Sourselist]
"PackageName"="tools-winPre2k.msi"

You must delete 7A26F0EA2A1AF704F9C48439B99DDAD8 folder.

After the folder is deleted, try installing VMware Workstation.

Note: In the same registry location (HKEY_LOCAL_MACHINE\SOFTWARE\Classes\Installer\Products), you might find entries below:

tools-linux.msi
tools-netware.msi
tools-solaris.msi
tools-windows.msi
vmwareworkstation.msi

If the installer returns similar error for any of the missing msi files, repeat steps 1 through 3 for corresponding msi files.