OK, I see.
If I created the "isolated" network, it's because I want it to be ... isolated! So I'm not going to connect vSwitch1 to the outside world (with or without a router).
I've found m0n0wall (http://m0n0.ch/wall/) which suits my need and it's the lightest alternative I could find. Actually, m0n0wall is designed as a firewall but since it has DHCP server implemented, we just need to connect one of its network interfaces and activate DHCP for that interface ... and that's it! Its VM image is very small, just about 10MB! But it needs about 150MB RAM and 500MHz from CPU to run, which is OK compared to a full Windows server (which was my original idea to use a VM).
After deploying it, we need to change its network adaptor. And then some configuration in text mode after bootup. If you aren't used to it, that might not be very obvious and would take a bit longer -- needs to read the documenations. So, it would take about 10 to 30 minutes to set up the DHCP server which isn't that bad.
I'm too used to VMware Workstation's virtual networking stuffs. Really handy. Too bad that they are not ported to ESXi.