I just had trouble running VMWare player (version 3.1.0 build-261024) on Win 7 and got this error:
Error while powering on: The following error occurred when starting VMware Player.W32AuthConnectionLaunch: Reply error "The system cannot find the file "" (code: 3).".
I Googled the error and turns out the fix is to run VMWare Player as Administrator.
I decided to paste the error and fix here so this site would also include the fix :)
(I hope this get's indexed by google)