I wanted to migrate the lab to Windows Server 2008 R2 and found some problems with the video drivers provided with vSphere 4.0. After a quick search at http://kb.vmware.com I found the following KB article: KB1011709. This article mentioned the new WDDM driver:
Troubleshooting SVGA drivers installed with VMware Tools on Windows 7 and Windows 2008 R2 running on ESX 4.0
• You receive a black screen on the virtual machine when using Windows 7 or
Windows 2008 R2 as a guest operating system on ESX 4.0.
• You experience slow mouse performance on Windows 2008 R2 virtual machine.
This issue can occur due to the XPDM (SVGA) driver provided with VMware Tools. This is a legacy Windows driver and is not supported on Windows 7 and Windows 2008 R2 guest operating systems.
To resolve this issue, update to ESX 4.0 Update 1. A new WDDM driver is installed with the updated VMware Tools and is compatible with Windows 7 and Windows 2008 R2.
Note: After a VMware Tools upgrade, the driver files are located in C:\Program Files\Common Files\VMware\Drivers\wddm_video.
So I installed the wddm_video driver from:
C:\Program Files\Common Files\VMware\Drivers\wddm_video
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