Failed to initialize not well-formed invalid token

A few Virtualcenter users are reporting the following error when trying to start Virtualcenter:

Failed to initialize: not well-formed (invalid token)

The problem seems to happen if one or more ESX hosts being managed have Update 2 on them, but Virtualcenter itself is running Update 1 or earlier.

The problem doesn’t show right away.  Not until Virtualcenter server is actually restarted, and it won’t start.

The resolution is to upgrade Virtualcenter to Update 2. Apparently some schema changes are applied to the SQL database that resolve this. After this is done the service should start ok.