I stumbled across two configuration issues with the beta of SCVMM 2008 (available on http://connect.microsoft.com). Here they are:

1. SCVMM does not like : in a path

I use local storage on my ESX server and ESX automatically gives that storage a label in the form of hostname:storage#. When I tried to deploy a virtual machine to ESX with SCVMM, it failed saying that the volume name was not recognized. Removing the : in the label solved the issue.

2. Issue with USB flash devices in Hyper-V host

When I added my Hyper-V host to SCVMM everything seemed to work fine except the Refresh-Host job. It turns out that in the beta, that job fails when you have USB flash devices in the system. Because I use an HP Desktop machine with built-in card readers, I had to disable them all in device manager. After disabling those devices, Refresh-Host completed without errors, making the Hyper-V host available for deployments.