Today, August 12th, 2008, is a bug in ESX 3.5U2. While ESXi is free… today your ESXi system will claim to be expired. This problem also affects ESX 3.5. The error message you will see is as follows:
Aug 12 10:02:10.792: vmx| http://msg.License.product.expired This product has expired.
Aug 12 10:02:10.792: vmx| Be sure that your host machine’s date and time are set correctly.
Aug 12 10:02:10.792: vmx| There is a more recent version available at the VMware Web site: “http://www.vmware.com/info?id=4″.
And when you try to power on a VM, you will get a message window with the following:
A general system error occurred: Internal Error
The only work around for now is to set your date back a few days manually and disable NTP automatic time update. Warning: This is NOT recommended in a production environment. Domain Controllers and other applications require the time to be correct.
For more information, check out this forum thread. Also, here is the link to the KB article.
We will update you when we know more information! Stay Tuned!
Update: VMware says they will have their update media fixed by noon (PST) August 13th. Watch the download site for the fixes to be released. As of now, they are unavailable. They also will have a seperate patch available later this week. Stay Tuned!
Update 2: I hear there will be a patch by 6:00 PM PST tonight!
Update 3: The patch is here! Your IT departments can now rest!

It seems that if your license server is still version 2.5, your 3.5U2 environment will be unaffected.
I’ve run into this issue as well – and have NOT updated to Update2 yet.
I used Update Manager to install only the critical updates on three of my ESX 3.5 Update1 machines and they all have this issue. So I still have the same licensing server and VC – that hasn’t been touched.
Thank you so much for this! I thought I was going crazy when a recently rebooted ESX server wouldn’t Power On its VMs!
[...] Then you can find the solution at this blog. [...]
The fix is already on vmware.com website. (http://www.vmware.com/download/vi/)
good one!
but how could i disable NTP automatic time update!??????????????