sorry, correction, the site with the issue is windows based vCenter5.5/esxi5.1
in this site I am also having issues with testing FLR restore client. logon always fails with "Login failed. Unable to authenticate client using provided local credentials." I've tried a local admin account on this VM and a domain admin account which is a member of the local admin group. Must be some SSO related issues. However, backups, replications and full VM restores work fine there.