I was just messing around with this same exact thing today. It looks like you're passing the credential to your configuration, but not to the resource that needs the credential. Have you tried:
cSCVMM_Hardware MyHardwareProfile { VMMServer = "MY-VMM-SERVER1″ CPUCount = 2 DVDDrive = $True Ensure = "Present" Name = "Jacobs Profile" VMNetwork = "Server Traffic" Credential = $Credential }