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I was attempting to install Windows Server 2008 R2 on a VM earlier today. I had the physical DVD in my PC and I configured the VM to use Client Device as the Device Type under CD/DVD drive 1. I would power on the VM, press <Esc> for the boot menu and then click the "Connect/disconnect the CD/DVD..." button. Then select the drive the DVD was in and the below message would appear:

Could not open the client device "X:". Check that the dvice exists and that it is not being used by another program.

The fix -

Select "Emulate IDE" under the Mode in CD/DVD drive 1.