I've just had the same error. Only change I made was installing vSphere PowerCLI. I then reinstalled client and problem still existed. (Everything is v5.1)
As a test, I installed client on another server and all worked as expected.
I did eventually solve the issue. I removed a Microsoft Office 2010 DVD from the drive and the problem fixed itself. (Had inserted it earlier in the day ready to install office, but due to the number of errors in the event log, there was an issue with it.