vcenter and windows session credentials

Hello,

I need some ideas on this one please:

I have installed a new vcenter 5.5 appliance. I am unable to log in with the "Use windows session credentials" option in vsphere client, however I am able to do so from the Web client (with the Use windows session credentials option).

Once "Use windows session credentials option" is checked, the credentials shown in the grayed box are testdomain\username and not testdomain.local\username which once entered manually - I am able to log in.

Any ideas?

Thanks!