Thanks for that!
It solved the error message problem and the tools installation could be done to the finish. 
I also managed to get a better screen resolution the following way:
1) I shut down the guest and in the display settings for the virtual machine I selected "Use host settings for monitors"
2) In the running guest after startup I could use the preferences/display screen (magically finally showed up) to select between a number of resolutions.
It does expand from the 1440x900 I have when running normally to my host system display 1920x1200 when I use the guest fullscreen button, but I cannot get any intermediate resolutions by resizing the guest window when it runs in windowed mode.
Anyway I am much better off now.
Thanks again.