I just completed an upgrade from 4.0 to 4.0u2 myself. This is what I did and I think you can do the same. I had three ESX hosts in productions, and I added a fourth one. I loaded the 4th ESX with 4.0u1 and didnt realize VMWare snuck an u2 in on me. So used the "esxupdate --bundle=upgrade-from-esx4.0-4.0_update02.zip update" command, where the "upgrade-from-esx4.0-4.0_update02.zip" is the offline zip file you can download from VMware. Your Host(s) will need to be in Maintenance mode when running this command and the host will need to be rebooted.
Makes it easrier if you have multiple hosts, because essentially there will be no down time as you can migrate your VM's to another host while you are performing the update.
Known caveats... VMWare tools will need to be upgraded on your VM's in order to be able to move your VM's back to the newly u2 host. The new tools require your guest VM's to be rebooted to. Hope this works for you.
Frank
