I’ve just been informed that Microsoft released a patch on Tuesday (9th June 2010) to update .NET which has effetely stopped any versions of the vSphere client prior to U1 working.
The only fix is to download the latest client from VMware.
The following kb article explains this. http://kb.vmware.com/selfservice/microsites/search.do?language=en_US&cmd=displayKC&externalId=1022611
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