I see one other report of the same thing on the vmware forums:

http://communities.vmware.com/message/1839303

Thanks,

||Rich

On Oct 28, 2011, at 5:17 AM, Stefan Hajnoczi wrote:

> Rich: Thanks for the ESXi 4.1.0 and vSphere Client 4.1.0 version info.
> 
> Fam: Do you have any suggestions how to debug the "Error uploading
> file path/to/image.vmdk to server.  Not a supported disk format
> (sparse VMDK version too old)" issue?  Ideally qemu-img would create
> images that work with current VMware tools by default.
> 
> Stefan


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