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Which processor settings in VMware Workstation 9 are better: two processors with four cores per processor or four processors with two cores per processor? The Workstation 9 system in question has an Intel Core i7-3820 processor running at 3.6 GHz, with four cores and eight threads.
When creating a virtual machine and choosing the processor settings, I can only make a VM whose total processor cores equal or are less than eight, otherwise I get this notification: "The virtual machine may perform poorly or fail to power on because the total number of processor cores exceeds the maximum supported value of 8."
Physical CPUs are always better than cores, and cores are better than hyper-threading. The benefit of having a physical CPU is its dedicated connection to memory. If two cores are available on one CPU, the cores share the memory connection, which decreases performance.
In your configuration, the one physical CPU has four integrated cores with two hyper-threaded CPUs per core -- or an eight-CPU machine. Creating a virtual machine with more than eight CPUs means more than one virtual CPU has to run on one hyper-threaded CPU, leading to bad performance.
For best performance, make sure you never get beyond the total number of hyper-threaded CPUs on a machine.