Setting up LAGs is actually a pretty straight forward task.
First you create a LAG with the desired settings, and the number of ports per ESXi host, then you assign the ports from each host to the LAG uplinks. The last step is to set the LAG active on the dvSwitch (all the other dvSwitch uplink ports to unused). The Load Balancing setting on the dvSwitch itself doesn't need to be set to anything special (I usually leave it at the default "Route based on originating Port ID"), because the dvSwitch itself sees only a single uplink - the LAG - and the aggregation is done at the LAG level.
So what's important is to match the load balancing method on the LAG with the physical switch, and decide whether the LAG needs to be active, or passive.
Yes it was pretty easy to do I agree.
It has been done as you said, create the LAG, define the number of ports per host and assign them to the LAG uplinks. Set it as active. So basically we have one LAG with 8 ports assigned, with 4 NICs from each host assigned to it and each ESX uplink assigned to a LAG port. So essentially, all ports from both ESX hosts all in one LAG group.
What we don't do is create separate LAG groups per "host" and assign them to the vDS as the port groups can only use a single LAG as active and therefore one of the LAGs would be in the unused section and if the VM is on that host, then its not going to be able to communicate. That's correct aint it?
Yes, that should be fine.
A single LAG group configured with 4 uplink ports. The ports from each participating host are assigned to those 4 uplink ports, and the LAG group is the only "Active" member on the dvSwitch.
Thanks. That is exactly how I have it configured, but our network guy seems to think it doesn't look right.
It's basically only the LAG's load balancing mode, which needs to match the physical switch settings.
As mentioned earlier, load balancing on the dvSwitch itself may remain on the default setting.
What you also want to check, is whether the host's NIC firmware/drivers are up-to-date, to rule out such issues.