vSphere Client error in Windows 8, “The VMRC console has disconnected…attempting to reconnect.”

*UPDATE 2012-09-11
VMware ESXi 5.1 has now been released to the public along with VIclient v5.1. If you are using Windows 8, for info on how to avoid console issues as described below as well as the caveats with upgrading to v5.1.

See that screenshot above? This was my nightmare when re-doing my VMWare ESXi setup on my Dell OptiPlex 745. ESXi installed on the OptiPlex 745 just fine, and all of the VI Client features worked in my Windows 8 computer except for the console. A little investigation of this issue points to a warning in the Event Viewer. I found this warning entry for the VMWARE-VMRC.EXE (which is the VMWare Console executable):

Application 'C:\Program Files (x86)\Common Files\VMware\VMware VMRC Plug-in\Internet Explorer\vmware-vmrc.exe' (pid 1408) cannot be restarted - Application SID does not match Conductor SID..

Long story short, the VI client as of August 2012 doesn’t work yet in Windows 8 so don’t bother trying. The console view uses an Internet Explorer plug-in, which is not yet compatible with IE10 in Windows 8. Even disabling IE10 and forcing an alternate web browser in Windows 8 doesn’t fix the problem. If you really, really want to use Windows 8, just set up a new Windows XP virtual machine and use the VI client from the VM. That is your only work around for now.