This was a bit of a strange one that I came across when trying to upload the ESXi 5.1 Update 1 iso to an Update Manager in preparation to upgrade an ESXi 4.1 host to the latest version.
I was able to select the iso file but then came across the following error message when trying to actually upload it:
‘Failed to login. Error was: A web exception has occurred during file upload’
By performing a google search, as most of us would do when faced with an unusual message like this, I came across a VMware article that mentioned about Antivirus software causing issues with uploads for Update Manager. I went ahead and disabled the Antivirus software and tried again but the same error occurred.
Finally, I stumbled across an article by Damian Karlson (http://damiankarlson.com/2011/01/03/file-upload-failed-vmware-update-manager/) where he had basically been through the same troubles as I had. The solution that worked for him and subsequently worked for me was to stop the update manager service and then kill off any zombied Java processes before starting up the update manager service again. Here are the exact steps: