Today I have installed VMware ESXi on our Lab blades. While trying to connect to my ESXi 4 server using a vSphere client newly installed on Windows XP SP3 I had been hit by the below two errors:

Error parsing the server “server ip” “clients.xml” file. Login will continue, contact your system administrator.

and after I press OK buttom I was getting the following error:

The type initializer for “VirtualInfrastructure.Utils.HttpWebRequestProxy” threw an exception

Below are actual screen shots of the errors:

vSphere client error Error parsing the server server ip clients.xml file. Login will continue, contact your system administrator

OK great!!! you might not care that I hit the same error that you did, but you might care to find out the resolution. Actually after searching the web about the problem I had hit the following VMware forum post that had the answer on the fifth page of it http://communities.vmware.com/thread/211081

I thought it was worth it to share the solution in a post on my blog as many will be hitting the same problem. The way to resolve this problem is to uninstall the windows update KB980773. After doing that close your vSphere client & start it again and try to connect. It should now allow you to connect.

As many people seems not to figure out where the KB980773 as its in fact a Microsoft .Net Framework 2.0 Service Pack 2. I have just added the below image of my program files before removing the KB980773 hotfix to easy your identification of the hotfix.

Microsoft Update KB980773 Breaks vSphere Client

KB980773 seems to have undesired effect on MS DotNet Framework required by the VMware vSphere client to run. I believe we will have to wait for VMware to fix it or to push Microsoft to fix it.

Update: It seems VMware has resolved this issue in vSphere Client update 1 & later. Please look at the following VMware KB:

http://kb.vmware.com/selfservice/microsites/search.do?language=en_US&cmd=displayKC&externalId=1022611

At the end I would like to thanks Nikhil Patwa for sharing the solution on the VMware Forum. I hope this will help others who hit the same issue.