You have build an Windows Embedded 7 Standard or Windows Embedded 8 Standard ISO and would like to test that on your VMWare workstation. However you got the error "Windows Setup failed to open Distribution Share [D:\catalog] to locate language pack corresponding to the target UI language"
The error would look like similar like the following:
(Windows Setup failed to open Distribution Share [D:\ds] to locate language Pack corresponding to the target UI language. See setup log files unter [X:\windows\panter] for details.)
The issue caused that has nothing to do with your Windows Embedded ISO, its an problem with the VMWare Auto Installation which was/is selected during the creation from the machine. So instead choosing the ISO directory (red box) use the option to install the OS later (the green box). After you configured the VMWare boot from your ISO you created and everything will work as expected.