The first time I tried to create the virtual machine, it failed. I was trying the most natural way -- ran VMware Play and chose Create a New Virtual Machine; then selected Install disc image file (iso) as this option seemed knowing its job (It said: Fedora 64-bit detected. This operating system will use Easy Install).
Unfortunately, it resulted in a warning and a prompt:
Dracut Warning: Unable to process initqueue
Dropping to debug shell
It turned out the correct way of the installation is to use the other option: I will install the operating system later.
After the blank virtual machine was created, it would be better to set the Virtual Machine Setting on the Display, using the option Specify monitor setting and setting the resolution as 1024x768. That is because if you don't do that, you may not be able to see the Back and Next buttons during the installation.
The procedure of the installation was very smooth.
After the installation, login. Then I chose the Virtual Machine -> Install VMware Tools item from the menu bar. Extracted the VMware Tools tar file to a new directory and entered it. Then ran:
$ sudo ./vmware-install.pl
During the compilation, there were several errors reported. They were said to be independent so I just ignored them.
Then I could just power off (with the new gnome shell, I had to Logout first then Power off). Edited the Virtual Machine Setting for the Display back to Use host setting for monitors (I had set it to 1024x768 for installation). The Fedora 17 virtual machine was then ready.