An installation step failed. You can try to run the failing item again from the menu, or skip it and choose something else. The failing step is: Install the system
I've downloaded kali-linux-2016.2-amd64.iso torrent from Kali Linux's official website www.kali.org/downloads/
I've created Virtual machine by selecting Linux > Debian 8.x 64-Bit
I Gave Virtual Machine 30.00 GB Hard drive space and 2.00 GB Ram.
If I click continue then after a while the error reappears. I tried a lot of time to install but failed everytime, I seriously need help.
Processor: Intel(R) Core(TM) i5 CPU M430 @2.27GHz Ram: 8.00 GB Graphics: ATI Mobility Radeon HD 5470 OS: Windows 7 Home Premium, 64-bit 6.1.7601, Service Pack 1
Version: 12.1.0 build-3272444 (64Bit)
I had the same problem, and I have fixed it by increasing the space for the hard drive. by default you have 8 GB, increase it to 30 GB. and continue with the instalation.
I faced exactly the same predicament as your's and extensive search on internet did not yield any straight-forward answer.
My host OS level(Windows 7), VMWare version and Kali linux version & settings for Kali install attempt are similar to yours with the exception - that I did chose separate partition for /home, /var & /temp - I chose varying disk capacity size which you chose as 30G
While trying repeatedly to install with differing settings I noticed following pattern: - for 8G disk capacity setting the install step failed after approx. 20% completion - for 20G disk capacity setting the install step failed after approx. 40% completion - for 40G disk capacity setting the install step failed after approx. 80% completion
Finally the install step succeeded with 60G disk capacity value. So try increasing your disk capacity and give it a shot!