It looks like users who've upgraded to Update 2 for ESX server 3.5 are having problems powering on or Vmotioning their VM's. It looks like a bug was introduced to the licensing code with update 2 that knackers up operations on VM's when the clock strikes 12 August 08 ! Already powered on VM's are OK, and although MS Patch day is today, with a nice raft of fixes, if the systems are set to auto update, it *should* be OK, as the system won't be powered off, just rebooted, but I would turn off DRS.
Turning off NTP on the host and setting the calendar to prior to the 12th fixes the issue, and it shouldn't affect the time on the VM's, apart from the fact the time could drift.
I bet MS are rubbing their hands together, you wouldn't get this kind of snafu with Hyper-V !:-0
More on this here.
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