According to a recent post by Duncan, there is an issue with password in ESX(i) 4.1. Only the first 8 characters of a password are taken and validated. A VMware KB article offered solutions to this issue.
Interestingly enough, vSphere Java API community reported a bug with vSphere API’s HostLocalAccountManager managed object: a piece of code creating a new user account used to work with ESX 4.0, but no longer with ESX 4.1 without any change. My first thought was to check the API reference to see if there is any change with parameters, especially those data objects embedded in the parameters. Then I suspected it might be associated with policies of password. I found another KB article related to password while searching for answers.
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After several rounds of trials, it turned out the issue was related to the user name. As reported, the problem was caused by “.” (dot character) which is no longer allowed in user name of ESX 4.1. Removing the dot solved the problem.
I think this issue may not be as common as the password because not many people use “.” in user name. But if you get this problem, it’s hard to root the cause. That is why I write this so that you can easily avoid the issue before it happens.