Entire VM restore fails with 'An error occurred while taking a snapshot: Error.'

This can occur when there exists a workingDir entry in the VMX that is causing the VM to direct snapshots to a different datastore that is not present in the site where the restore is taking place. 

In order to restore the VM a VM Files restore must be performed. This type of restore will restore the VM Files directly to the datastore, without attempting to register the restore VM.
 
1.  The procedure for perform a VM Files restore can be found here: http://helpcenter.veeam.com/backup/70/vsphere/performing_vmfile_restore.html
     Please keep in mind you must manually specify the host and folder on the datastore where the restored information will be placed.

2.  After the VM Files restore completes, edit the VMX and remove any workingDir entries. Tips for editing VMX: kb.vmware.com/kb/1714

3.  After correcting the VMX, add the VM to inventory.  kb.vmware.com/kb/1006160
 
If you are unsure on how to proceed, please contact VMware support for VMX modifications.