EDIT: I admit the original blog post was too much of a slant towards product group testing, without much context (and probably not fair), so the anonymous comments were well deserved without that context. I had been doing some investigation on SVGA interaction with ESX 4 Update 1, and discovered a pattern that other vendors as well as Citrix must use workarounds (not installing the SVGA ESX driver) in order to get products functional. By the end of the trail, I wound up at the Update 2 issue listed below.

This is where I started out on the trail.

XenDesktop workaround with Update1:
Workaround: Uninstall the SVGA driver

Other investigation led me here:

Pano Logic workaround with Update 1:
Workaround: Uninstall the SVGA driver

Which then led me here:

If you didn’t know, ESX 4.0 Update 2 was released on June 10th. Here are the public release notes:

On June 15th, a blog was released informing of this Update breaking PCoIP.
Here’s the blog reference:

On June 17th, they released a workaround stating how to get it working again:

Basically any product that used the XPDM display driver in Windows 7, no longer functioned as of Update 1, as the vmtools replaced it with WDDM drivers. In the case of Update 2, it also broke PCoIP, somewhat similar to how Update 1 did for the other vendors.

This is because Vista/Win7 can only use one display driver or the other.

So it’s up to the vendors to create products that leverage the VMW-supplied WDDM driver, or uninstall and use their own. Of course if they uninstall, the /console experience may not be desirable for the admin. XenDesktop does have the HDX 3D Graphics Pro agent that leverages WDDM, but that was meant for physical blades and harnessing high powered CUDA-enabled systems, not vanilla desktops.