As many of you already know there is an issue with the encryption mechanism of ESX(i) 4.1. When passwords are used which are longer than 8 characters the password will be truncated after the 8th character. As such during authentication only the first 8 characters are used. In other words if you have a 10 character password you will only need to type the first 8 characters correct and the rest can be completely random.
The KB article that was published yesterday contains a workaround to change this behaviour. I recommend everyone to read the article and implement this workaround when your password policy describes passwords longer than 8 characters.
vSphere 4.0 Quick Start Guide
I was going to ask if this is a bug or intended behavior, but the KB answered my question. From the KB:
“VMware expects to release a permanent solution to this issue sometime in the future. We recommend that you remove the workaround from ESXi systems when you install the permanent solution.”