Many of us in both the physical and VM world have run into the issues where we can no longer remote into a machine using RDP and only a reboot resolved the issue.
Another round of googling found the answer
http://support.microsoft.com/?kbid=922044
Workaround as per Microsoft
However, if you cannot restart the terminal server, you may be able to restore connectivity at the console by recreating the RDP-TCP connection. To do this, click Start, click Run, type Tscc.msc, and then click OK.
What this artical does not tell you is that you need to Right click the connection, select enable and then under the properties re-select the network adapter (you will receive an error when you first enable and select the network tabs.
It appears Windows is screwing something up when it disconnects a session (we have sessions terminated after 1 hour)