Vmware KB 2035510 "Cannot complete login due to an incorrect username or password"

Logging into vCenter Server 5.1 or 5.5 using the vSphere Client with an Active Directory domain account and selecting the Use Windows session credentials checkbox, fails with the error:

Cannot complete login due to an incorrect username or password

Cause:
Active Directory Identity Sources must be added to the Single Sign On (SSO) configuration with the domain NETBIOS (short name) as the Domain Alias. If a Domain Alias is not configured with the domain short name, authentication using session credentials may fail.

Resolution:

To resolve this issue, remove the existing Active Directory Identity Source, and recreate it with a Domain Alias.

To remove the existing Active Directory Identity Source, and recreate it with a Domain Alias:

1. Log into the vSphere Web Client using the Admin@System-Domain (for 5.1) or administrator@vsphere.local credentials (for 5.5).
2. Click Administration.
3. Under Sign-On and Discovery, click Configuration.
4. Click the Active Directory identity source.
5. Under Actions, click Edit Identity Source.
6. Make note of the information in the identity source.
7. Click Cancel.
8. Under Actions, click Delete Identity Source.
9. Recreate the identity source using the short NETBIOS name in the Domain Alias field.
10. Click Test Connection.
11. Click OK.

Ref:
http://kb.vmware.com/selfservice/microsites/search.do?language=en_US&cmd=displayKC&externalId=2035510