As I pointed out in my past posts, I was having some weird errors with SLES10 regarding mounting CD images inside the guest (as well, as it turned out, on the physical hardware).
Now, finally, after about a week or so Novell finally released an updated kernel package today. So the error per se is fixed, I can use my CD drives again, as well as update my virtual machines by means of virtual center, without the trickery of copying the linux.iso from /vmimages/tools to the guest and mount it by means of mount -o loop.