Rename a virtual machine in VMware Fusion
First, make sure your virtual machine is powered off, not suspended.
Then, find your virtual machine's folder, most likely in Documents. Right- or control-click on the virtual machine file you want to rename and select "Show Package Contents."
Find the VMX file, right- or control-click it and open it with Text Edit or your favorite text editor.
Find the line called displayName and change it to the name you want. In my case, "Windows 7." Then save the file.
Now go launch VMware Fusion. In the library, select the wrongly named machine and delete it, but choose "Keep File."
Go back into the finder to your virtual machine's folder and rename the virtual machine file name to the correct name.
Now go back to the VMware Library. Choose File, then Open.
Browse to the newly renamed virtual machine. Select it. When it asks if the VM is moved, select "I copied it."
Voila! Your VM has a new name.