The service principal name for the VMRC server could not be registered. Automatic authentication will always use NTLM authentication. Error 0x80072098 – Insufficient access rights to perform the operation.

One way to solve it is available at:
http://support.microsoft.com/default.aspx?scid=kb;en-us;890893

pretty much the cause of the problems is that:
This issue occurs because the Network Service account that Virtual Server uses does not have permission to write the SPNs to Active Directory. Therefore, the SPN for vssrvc/Computer_Name and vssrvc/Fully_Qualified_Domain_Name are not registered in Active Directory.