Over the last few weeks I’ve been testing some scenarios and generally looking at System Center Virtual Machine Manager. Yesterday however I came across this error “Virtualization Service needs attention”. Even though I had all of the services running?? Anyway after some digging I figured out what was wrong. You need to install these two updates on the target host.
This article describes the Hyper-V update that addresses issues that may occur when you manage the Hyper-V role on the 64-bit editions of Windows Server 2008 by using System Center Virtual Machine Manager (SCVMM).
A Background Intelligent Transfer Service (BITS) client cannot handle files that have paths that contain the volume GUID in Windows Server 2008 or in Windows Vista
Once you’ve done that – quick restart and you’re good to go.