We're already using a third-party backup solution for file-level backups, on our physical servers that haven't been converted yet and also at least one that has.

We have HA/DRS enabled but I think people want assurances that go beyond normal file-level backup and restore capabilities. In other words, in addition to being able to restore document A that got deleted from folder B yesterday, we want to also possess the ability to restore VM C quickly if it somehow becomes corrupted due to a botched software install or whatever. Coming into this, I had the assumption that this would be a built-in feature of VMware and I guess it is if you're talking about using snapshots but I've been reading through the Virtual Machine Backup Guide - Update 2 and later for ESX Server 3.5, ESX Server 3i version 3.5, VirtualCenter 2.5 and it also seems to discourage the use of snapshots outside of VCB. I'm sure we can also use the snapshot capabilities of our SAN to perform scheduled snapshots of entire LUNs but I haven't gotten around to looking at that side of the equation yet.