PD10: Remote Desktop giving 'The username or password isincorrect' error on Windows 7

I recently upgraded from PD8 to PD10.
Once I upgraded to PD10, I noticed I can't remote desktop to other machines anymore. When I try, it gives me 'The username or password is incorrect' error.
I tried a fresh image of Windows, and I'm getting the same problem.

If I downgrade to PD8 (using the same VM), I'm able to remote desktop to other machines again.

Is anyone else having this problem?

 

I had/having this problem.

I sorta* solved it by going into the configuration for the VM and selecting Mouse and Keyboard under Hardware, change the keyboard to 'Optimize for games'. Restart VM and this will work.

* There is a caveat ... if you go into Coherence mode. and restart Parallels ... it will stop working again until you move to windowed or full screen mode.

This issue is annoying as hell. Hopefully Parallels resolves this issue quickly.

 

See other (later) threads. In PD10 the shift key is not respected on the first character which will prevent you from logging in in the case where you have a mixed case password. The caps lock key appears to work fine.