Well. researching further it looks like vCenter 4.1 U2 is compatible with both the version of SQL I listed in my previous post (MS SQL 2005 ENT SP3 and MS SQL 2008 ENT R2). So, i just wanted to verify is this is the only or best upgrade path for us:
1. Upgrade vCenter from 4.1 to 4.1 U2
2. Migrate the vCenter SQL database to our MS SQL 2008 R2 Enterprise 64 bit server
3. Upgrade vCenter from 4.1 U2 to 5.0 U1