Two different methods for implementing inertial damping on a Virtual Synchronous Machine (VSM) and their potential for attenuating power system oscillations when utilized in a VSC HVDC terminal are investigated in this paper. As a reference case, the VSM is considered with only a frequency droop providing damping in the virtual swing equation. Then, the effect of damping based on high-pass filtering of the virtual speed is compared to damping based on high-pass filtering of the measured grid frequency. A simplified model of a power system with two equivalent generators and a VSC HVDC terminal is introduced as a case study. Analysis of the small-signal dynamics indicates that damping based on the VSM speed has limited influence on the power ...