The ISE 11.4 Clocking Wizard assumes that the DIVBY2 feature (which divides the input to the DCM by 2 before the DCM input pin)is beingused. Therefore, it allows 2X the maximum input clock frequency (500 MHz while the maximum input frequency is 250 MHz).
This "Divide By 2" feature is available and it can be used, but the Architecture Wizard mistakenly assumes it is always used.This assumption is removed in ISE12.1 Architecture Wizard, so the input frequency range is correct.
The workaround for ISE 11.4 software is to not violate the input clock frequencies in the Spartan-6 FPGA Data Sheet. The preferred workaround is to update to the most current software version. For the allowed input frequency range of the DCM, see the
Spartan-6 FPGA Data Sheet: DC and Switching Characteristics (DS162):
http://www.xilinx.com/support/documentation/data_sheets/ds162.pdf