I'm posting this just in case someone else is as much an idiot as I am.
I use RDC a lot in my home network. I have 4 or 5 systems, each dedicated to specific tasks. I know it is possible to use Virtual PC or VMWare to do a lot of what I'm doing, but what the hell. I have a lot of hardware lying around, so I use it.
I encountered this problem when trying to connect to one of my Vista laptops (which is dedicated to running all of the 'beta' development stuff for Visual Studio 2008). I've connected to it many times, without a problem. But now, it insisted that I couldn't connect because I was already on the console.
WTF? It's supposed to give me access to the console. I physically moved the machine, sure, but why would that change anything?
The answer? I switched the names, and was trying to RDC into the laptop I was launching RDC from, not into the remote laptop (if that isn't clear, I was trying to RCD into Laptop A FROM Laptop A. When I really wanted to RDC into Laptop B).
First rule of troubleshooting: idiocy check.