The reason this happens is because the 3.1.2 agent can mess up the userinit entry. If you use remote registry editor (in regedit, click File, Connect Network Registry) you can go to the userinit item and you'll find that it's probably missing a comma. Mine looked like C:\Windows\system32\userinit.exe"C:\Program Files\VMware\VMware View\Agent\bin\wssm.exe"
Add a comma between those 2 and you can login again