I'd say there is something wrong with your system/installation of Windows...
Could be. But, it is a clean win98 install, then I installed
vmtools, then I've run cygwin setup (the experimental one),
three times, and only done really minor things in the
cygwin terminal ("mkdir", "touch", "ls -l", "cd").
Oh, and I ran IE to go and get the experimental setup.
Probably now I redo the same test with the non-experimental
setup, and see what happens.
VM as in running Windows on top of say Mac OS/Linux?
Actually on top of Win2000. (Using vmware. It is the
only way I have time to test stuff on virgin machines.)