I know this is late, but for the people who have this problem uninstall the Windows update KB 980773. It should be located under the the Microsoft .NET Framework 2.0 Service Pack 2 group. After the update is removed, you should be able to login to the VMware Infrastructure Client. I have not tested this on 2008 platforms, but I can tell you that it works for Windows 2003 based platforms. Hope this helps.....