Anyone that have implemented Microsoft Network Load Balancing in a VMWare virtualized environment will fine out that the NLB cluster will break and not work if the cluster members are in different VM hosts. We learned the hard way when we shutdown one of our VM server and NLB members automatically moved to different servers which later caused connection issues to the cluster. It didn’t make sense at the beginning because it kills the purpose of load balancing. All the NLB members, in our environment, need to be inside the same VM host for our NLB cluster to work.

This does not affect NLB cluster setting with Multicast setting.

You can view VMWare “Implementing Microsoft Network Load Balancing in a Virtualized Environment” pdf for instructions on how to correctly setup your NLB Unicast setting or to NLB Multicast mode.