We had this problem. It happens when you start WUG using 256 colors. So in other words, if you turn your server on then log into it from remote desktop using 256 colors, then WUG is going to be screwed up. Once WUG is loaded and running using something higher than 256 colors, we've never had any problems connecting to the server with 256 colors. It seems to be just the first time it starts up.
Also, verify that you're using the /console switch on your remote desktop shortcut. I've seen problems with logging into a server without that switch and doing stuff in WUG.