To direct input to the virtual machine, VMware Workstation grabs the keyboard and the mouse so all keystrokes, mouse moves, and button clicks go to the virtual machine. (See Interacting with the Virtual Machine.)
You can choose when VMware Workstation will start grabbing input:
When Grab On Mouse Click is selected, VMware Workstation will grab the keyboard and the mouse on the first mouse button click in the virtual machine's window. The first click in the window is not sent to the virtual machine.
When Grab On Key Press is selected, VMware Workstation will grab the keyboard and the mouse on the first keystroke in the virtual machine window. The first keystroke is sent to the virtual machine.