A few fairly simple questions (or so I hope) ...

A customer for which I'm starting an ESX migration project is running about 50 ESX hosts with around 500 VM's.
The environment is currently 2.5.2 and they want to upgrade to ESX 3.5 U3. VirtualCenter is already 2.5 (since it already manages a different ESX 3.5 infrastructure).

I want to use Dmotion (Upgrade Vmotion) to get the VM's to the new infrastructure. So now my questions:
1. I know I can't directly upgrade from 2.5.2 to 3.5 U3, but if I have new hardware on which ESX 3.5 U3 will be directly installed and new empty VMFS3 datastores, is this still an issue?
I think that the patch version of ESX 2.5 doesn't change the VMFS2 datastore or VM2 formats of the virtual machines. Is this correct?
2. Once I have my new environment up and ready to receive VM's, how do I do the Dmotion? Is it just selecting the option "Relocate VM files" or is there more to it?

All licenses, HW requirements, storage is all no issue ...

Thank you in advance,