Yes, it can work! I have it working on vmware-server 1.0.7, Linux host.

read this: http://www.ogris.de/docs/vmware-server-vrrp.html
and this: http://mark.foster.cc/blog/2008/10/pfsense-and-carp-on-vmware-server.html

Basically a small hack the vmnet driver.

I don't think this will work on ESX though, just vmware-server.