Installing App-V Management Server 4.5 on Windows Server 2008 x64. With SQL Express 2005 as the database.
Issues:
#1 Error 25120. The installation program was unable to create the required IIS virtual directory.
Solution: Install Role Service ‘IIS 6 Management Compatibility’ -> IIS 6 Management Console (I checked all, but not sure all the II6 tools are necessary).
#2 Connecting to Application Virtualization Systems (using the App-V console), error: Unable to log into the Application Virtualization System.

Unable to log into the Application Virtualization System, Invalid user name or password, Error code: 0000C801
Solution: Install ‘Windows Authentication’ Role to IIS.

Thanks, that was the solution. 😉
-rene
I had exactly these two issues one after the another, thanks for posting this!