I"m trying to figure out what I need to set up for the VM in VMWare I'm going to be running Photoshop CS6 Extended on.....the VM is Win7 64bit.
What is the hardware you run (either mac or windows) that you run PS with and it is smooth for you?
Disk drive read/write speed and memory are going to have a huge impact on VM performance. VM will still be slower than running a dedicated box though:
Disk drive speed (RAID 0+1, preferably with quick solid state drives, is preferable - don't have to be huge to be fast)
Memory - make sure you're using dual channel capabilities by matching sticks, 4~8GB is probably a good place to start if you're running windows as the VM OS, then Photoshop on top of that, then the pictures you're editing, then adjustments/history/etc., plugins, and so forth.
Don't know your tech level, but a more advanced option would be running Linux in the VM (or on a standalone box), and using WINE (or similar emulation) to run Photoshop. The lighter weight versions of Linux will need far less hardware resources, leaving more for what you actually want to do: run Photoshop. There are tutorials out there on how to run CS6 using WINE.