The "Update XX" patches are usually cumulative, whereas the other patches aren't necessarily. With that said, why don't you use Update Manager? This way you can select all available patches for version 5.0 and Update Manager will take care of the rest.
I never installed update manager and now I just need to get patched to get this problem resolved. I plan to get update manager going for next time, but I was wondering which patch to run for a manual update this weekend.
If I don't find a definitive answer, I'll probably just do the u1 patch and then get UM going for the rest.
The patch bundles that you download from the patch download portal are indeed cumulative.
So it is sufficient to install the latest available patch bundle.
See this thread for more info: http://communities.vmware.com/message/2139658