Written by I just had some great experiences with multicast and I want to write them down so I don’t forget them. I followed Johan Arwidmark’s advice on being buddies with the network guys before starting and that helped me a lot. 🙂
First thing first, the network guy had to turn on IGMP snooping on all the switches. He also enabled something called PIM-SM, that was for routing the multicast traffic.
http://en.wikipedia.org/wiki/Protocol_Independent_Multicast
He specified various IP ranges for multicasting. In the SCCM documentation it stated that valid ranges for SCCM is 239.0.0.0 to 239.255.255.255 this did not work in our setup. We had to use the 224.1.1.0 range instead. I think this was because of limitations on the switches we worked with.
Our next challenge was VMware. We traced the IGMP to stop on VMware. It turned out that a vm with E1000 nic can not host a multicast session. It has to be VMXNET3. This was difficult to find out. We thought of course that this was an VSphere issue that did not forward the IGMP correctly. But an article from VMware stated that VMware fakes IGMP and it is enabled by default.
Source: http://www.vmware.com/files/pdf/technology/esx35_ip_multicast.pdf
Another thing was that was an issue was the actual speed we got. We thought it was very slow. It turned out that the default value on the transfer rate field was 100MB. We changed it to 1GB and the speed went up a great deal.
We turned on the “allow this package to be transferred via multicast” on the OS image. 
We also turned on “download content locally” on the advertisement: 
We used VLC player for testing multicast. A great tool for testing. Here is a guide on how to use VLC to setup a multicast stream for testing the network : http://blog.michaelfmcnamara.com/2008/03/multicast-routing-protocol-part-1/ (A great article)
This hotfix is worth looking at if you have an issue with hash errors: http://support.microsoft.com/default.aspx?scid=kb;EN-US;971413
A quick post on problems with the Multicast DP settings not applying at all:
http://support.microsoft.com/kb/2419357
Pre-Reqs for Multicast is nice to read before starting out with multicast: http://technet.microsoft.com/en-us/library/cc161876.aspx
I will update this post when I experience other things with multicast.