ESXi installation option
With the installable version of ESXi there is the option to install on local disk or on flash memory like USB stick or SD card (quite the same case of the embedded version).
The option is fully supported:
http://kb.vmware.com/kb/1010574 - VMware support for USB devices used for installing VMware ESXi 4.0
What is the best solution?
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Why choose flash memory?
There could be a lot of benefit in this kind of solution:
is like an embedded version of ESXi
the solution is more flexible
you can have diskless node, without the need of boot from SAN
do not loose any space on the local hard disk and you do not have a silly partitioning that can create problem in future grow of your disk
Increase the availability of SD solution
Dell is introducing a new redundant SD-card module for embedded hypervisors starting with the latest Intel® Xeon® 6500 and 7500 Series processor -based platforms, such as the M910, R910 and R810 as well as the AMD Opteron™ 6000 Series processor-based platform, the R815. This module provides the same feature set as the previous embedded hypervisor SD card solution, with the added feature of a mirrored SD card.
http://www.dell.com/downloads/global/products/pedge/en/poweredge-idsdm-whitepaper-en.pdf
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Flash memory requirements
You'll need 1 GB of space (after the install make sure to set the scratch location in advanced options) and you should be using USB 2.0 certified flash devices. ESXi creates a RAM drive when it loads so most of the writes it does are to the RAM drive and not flash so I wouldn't worry about the disk load of the ESXi install partitions.
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Flash memory problems
The solution could be less reliable compared to a RAID solution with hard disk, cause if you have a problem on the flash unit you cannot power-on and power-off correctly the ESXi.
When ESXi is running it works on a ramdisk, so the flash can "fail" without "big" problems.
Some vendor (like Dell and Cisco) will release a special configuration with a dual SD reader to implement a "RAID" configuration also for the flash card.
But there is also a more simple solution: you can clone your flash periodically (for example with the command dd) to another "backup" flash.
Another problem is that flash memory are very sensitive to writes, and have limited amount of writes which can be exhausted really fast.
ESXi will minimize the I/O on flash memory (for this reason it runs on ramdisk).
See also http://www.corsair.com/_faq/FAQ_flash_drive_wear_leveling.pdf
For the log problem, the right solution is a central collector for the all the logs.
RAID-1 with SD card
More info on Dell PowerEdge with redudant sd-cards:
http://www.dell.com/downloads/global/products/pedge/en/poweredge-idsdm-whitepaper-en.pdf
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Reference
http://www.petri.co.il/installing-esxi4-in-embedded-mode.htm
