Windows Server 2008 R2 - Mouse performance slow, server hangs when modifying video hardware acceleration settings in the registry (video1,2,3,4 keys)

Symptom - Windows Server 2008 R2 hangs when accessing the registry to modify the VSA video settings (Video1,2,3,4) via the console (not RDP) in VMware ESX (now vSphere).

Resolution - Even with Video hardware acceleration on, in order to succesfully view and modify the video registry key through the console and have a stable server, you must upgrade your ESX farm to 3.5 Update 5 or to vSphere 4 Update 1 (Thanks to Luyt and Danks on this one).