When upgrading to vSphere 5, be sure your PHD VBAs are configured with vCenter Server credentials,
In vSphere 4 environments, PHD Virtual Backup Appliances can backup local VMs when configured with individual host credentials even if that host is managed by vCenter (to backup VMs across hosts, vCenter Server credentials are required).
In vSphere 5, however, if your VMware host machines are managed through vCenter, you must use that vCenter Server's credentials when configuring your deployed PHD Virtual Backup Appliances. If your vSphere 5 hosts are managed by vCenter and you enter individual host credentials for a PHD VBA, you will not be able to run backups.
When upgrading to vSphere 5, be sure your PHD VBAs are configured with vCenter Server credentials, if applicable.