Windows 2008 Remote Desktop will not copy+paste

I have just set up a Guest Windows 2008 R2 Standard Edition 64bit (VirtualBox on Windows 7 64 bit host) for some testing.

I have found that while "inside" the remote desktop environment (i.e. I remote onto the guest ip from the host) that copy and paste does not work. When I say "does not work" let me be explicit.

• Assume I am logged onto the Win2008 machine via RDC
• Nothing is in the copy/paste buffer. I can mouse click some text and then rclick copy. I can then right click and click "paste" but nothing happens. I can see the "choice" is enabled to paste bu nothing happens. The caret stays put.
• CTRL+C / CTRL-V / CTRL-X does not work in RDC land
• I am not talking about going in-between copy/paste RDC land/host land.

HERE is the double whammy: when I do the above it then "infects" my host pc so that copy paste is unavailable there too. if PRT SCR doesn't work any more.

I have tried:

• restarting the guest os and host os
• in group policy editor I have disabled "do not allow clip board redirection" ( I can't give you the full path to this copy/paste just broke again)
• I have made sure that in RDC "options" for local resources include clipboard.
• NB: if I don't touch RDC at all and log into the guest OS via the console copy paste works perfectly