VMware has a nice whitepaper called Windows 7 and Windows 8 Optimization Guide for Horizon View Virtual Desktops and it also includes a script (in several editions) based on the recommendations described in this paper. This script is meant to be run in the parent image and it will disable automatic updates, Aero, defrag, and many other things that can cause negative performance in a large VMware View environment.
If you're having VMware Blast enabled in order to access the desktops through HTML5, you will get the Protocol Failure message. This is because VMware Blast depends on the Windows Firewall service and will refuse to run if the Windows Firewall service is not running. The optimization script disables the Windows Firewall.
Enable the Windows Firewall service in the parent VM.
Note that there is at least one other situation that can cause this same error message:
VMware View Administrator shows the virtual machine status error: Configuration Error (1039274)