Errors installing VM's directly on SAN

I am running ESX 4.1 with connecitons to both an AX150 fiber SAN and an Openfiler iSCSI SAN.  All NIC's are 1Gb.  When I try installing a VM on either Fiber or iSCSI directly (instead of on local disk first then moving it to the SAN), I get errors.  The iSCSI network connection eventually starts freaking out part way through the install, at which point my continuous pings start dropping to 50% successful, which causes the VM install to fail.  

When I try installing directly to the Fiber SAN, it gets down to about 7 minutes left on Windows 2003 Server and gives me the error:  Windows was unable to save all the data for the file C:\Windows\System32\setupapi.dll.  The data has been lost.  This error may be caused by a failure of your computer hardware or network connection.  Please try to save this file elsewhere.  

So this leads to my question:  Is it always best to install a VM on the local disk then move it to the SAN, or should it not normally matter?  Note that after installing on local disk and moving to iSCSI, VM works fine.
B1izzardAsked:
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Danny McDanielConnect With a Mentor Clinical Systems AnalystCommented:
That is not normal behavior, you should be able to create a new VM directly on the SAN.  Since it is affecting both iSCSI and FC, then I'd look for something wrong in the host logs /var/log/vmkernel
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IanThCommented:
is any vms currently working on the san
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zazagorConnect With a Mentor Commented:
Hi,

Both ways should work but local disk is faster.

//zaZagor
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B1izzardAuthor Commented:
Strangely enough, I used a different Windows DVD to install on fiber and it worked ok.  I created a 'bonded' NIC in OpenFiler so I now have 2 x 1Gb and it seems to be working.  Strange..
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