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Hi Chris, you can find a summary of the new features here - http://www.vmware.com/support/vi3/doc/vi3_esx35_vc25_rel_notes.html. Most are multi - server / VirtualCenter related so they wouldn't apply to your host. Are you using VirtualCenter and which edition of ESX (starter, standard, enterprise)? There are new features for each edition of ESX. For example, the starter edition is now called Foundation and it includes virtual SMP and removes the 8 GB / local storage limitations.
You may need to upgrade your license file depending on your edition. Both the starter and stardard editions include new features so you would need a license file that includes those features. It would be free if you have a current support agreement in place. http://communities.vmware.com/message/822816#822816
Before you do the upgrade, I would definitely get something in place for backups. This product (www.esxpress.com) comes in a free version which allows full backups of your VMs. I've done both the CD and esxupdate upgrades and I would lean towards the CD upgrade myself. But I would also recommond a fresh install of 3.5. That way you don't have to worry about upgrade gremlins. You would have the option to perserve the VMFS data store and you would just need to register your VMs after the install and setup your netwoking and other options back to the way you had it.
Personally if you read throught the release notes and nothing jumps out at you, I would stick with just getting ESX 3.0.1 patched. You can download the 3.0.2 update 1 CD image and upgrade from CD. 3.5 has only been out for a few weeks and as the saying goes for Microsoft products, sometimes it's a good thing to wait until SP1. 
To start, your release level can be updated directly to V3.5 according to the support matrix
As far as benefits are concerned, thats harder to define - it all depends whether any of the features or fixes provided by 3.5
would aid your business or the support of your systems. The simple fact is that moving forward with the general release schedule
make future support great deal easier. As far as the additional licence key is concerned the upgarde is free and does not require a key without so
long as you have a valid Service Subscription Support contract. I've used the CD ROM path and can only vouch for that - the end result is the same.
Lastly you need to start looking at some methd od backing up your VM's - plenty of theads on the forum for that. Search for VCB, ESXRanger and esXpress. Make it a new years resolution
Hi Chris, you can find a summary of the new features here - http://www.vmware.com/support/vi3/doc/vi3_esx35_vc25_rel_notes.html. Most are multi - server / VirtualCenter related so they wouldn't apply to your host. Are you using VirtualCenter and which edition of ESX (starter, standard, enterprise)? There are new features for each edition of ESX. For example, the starter edition is now called Foundation and it includes virtual SMP and removes the 8 GB / local storage limitations.
You may need to upgrade your license file depending on your edition. Both the starter and stardard editions include new features so you would need a license file that includes those features. It would be free if you have a current support agreement in place. http://communities.vmware.com/message/822816#822816
Before you do the upgrade, I would definitely get something in place for backups. This product (www.esxpress.com) comes in a free version which allows full backups of your VMs. I've done both the CD and esxupdate upgrades and I would lean towards the CD upgrade myself. But I would also recommond a fresh install of 3.5. That way you don't have to worry about upgrade gremlins. You would have the option to perserve the VMFS data store and you would just need to register your VMs after the install and setup your netwoking and other options back to the way you had it.
Personally if you read throught the release notes and nothing jumps out at you, I would stick with just getting ESX 3.0.1 patched. You can download the 3.0.2 update 1 CD image and upgrade from CD. 3.5 has only been out for a few weeks and as the saying goes for Microsoft products, sometimes it's a good thing to wait until SP1.