Host Only Supports 1 vCPU: Licensing?

I had a fun day resolving a licensing issue for a client. This one was a little different than I had seen in the past. The cluster is question is an eight node cluster running ESX 3.5. The error message that I received when trying to perform a vMotion was “Unable to migrate from HostA to HostB: Virtual machine has 2 virtual CPUs, but the host only supports 1. The number of virtual CPU’s may be limited by the guest OS selected for the virtual machine or by the licensing for the host.”