1. How can testcomplete know when the vmware image is up so that I can take away the ugly delay?
As far as I know, VMWare provides a COM object. So, you can try using the COM object to obtain information on the virtual machine's current state. Please see the "Working With COM Objects" help topic to learn how to work with COM objects from TestComplete. I recommend that you contact the VMWare support team for more details on the COM object's methods and properties you need to use.
2. How can I extend the "timeout" for Task completion?
Please see the "Terminating Tests on Timeout" help topic for information on timeouts in TestComplete.
-- Dmitry Nikolaev
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