We do connect to vm console via vnc viewer which is why you noticed that vnc errors on log. I think even with a vanilla base esx5.1 update 1 I noticed the console refresh issue, it is like initially you see the issue and then after a while it disappear. Whenever there are updates on the console, you see the slow paint issue. This is definitely a bug that started with ESX5.1. Most likely many people didn't notice since not many people use VM console as heavily as we do, coz when you connect through RDP you will not see this issue since you are not using console in that case and only accessing through inband network.
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