There isn't anything like top 3 reasons because that all depends on your needs. If it is a productive system, I would go for a real install as it would be running on the actual hardware rather than in a Virtual Machine environment and would obviously perform quite better.
I didn't mean that you shouldn't go for a virtual install. You obviously know what you want to do with that install and what would be better. I meant that there aren't many people around here, probably, who might have tried installing Ubuntu in VMWare on a Windows host and thus know the solutions to what you are facing.
Later, when you provide the screenshot, we'll try to see if it is a general Ubuntu installation problem and would try to help the best way we can. But if it is a VMware specific problem, the question probably needs to go to their forums unless some other mate jumps in this thread who's got the experience.
And it depends on your CPU architecture. If it is 64-bit capable, you should go for 64-bit Ubuntu. Accessing huge amounts of RAM is possible with 32-bit Ubuntu as well, as the
PAE-Kernel is available on the default installation image.
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