Just making a quick reminder for the next person to search forums for this topic. ESXi 4.1 does not install on Dell Optiplex 780's internal sata DVD/CD Drive. FIX: Use a USB drive and everything will be happy. ESXi v4 update 1 confirmed working, so upgrade path may work, but I didn't have the time to try.
If you mark it as a question and also mark it answered it would be obvious that it was a solution.
Just encountered the same problem.ESXi would come up and let me configure it, but then say it can't find the root disk (where it actually booted from).
I wonder why this is the case: The drive looks fairly common and innocent. Maybe ESXi doesn't like SATA-DVDs for install at all.
Best wishes, Frank