any answer to this question?
I need to do the same, and I have only one ESXi 3.5 (embedded) host.
fire up a esxi 3.5 test system as a vm and then upgrade it, and see how it handles the datastore.
Their is no disadvantage to disconnecting the SAN before the upgrade, if you want to make double sure.
I am risk averse on esxi upgrades. I would argue that upgrading to 4.0 u2 is a safer bet than upgrading to 4.1.
4.0U2 has had two set's of comprehensive of bug patches. 4.1 is a new feature release that currently has a handful of bugs that have not been patched, as they will with 4.1u1.
Not clear on how I would go about firing up an esxi 3.5 embedded host as a VM. Is this possible?
The latest version of workstation supports this.
Upgrading should not affect your existing datastore.
If I was doing this upgrade I would:
Backup all my vms and disconnect my datastore.
Do a fresh install of 4.0 (on a new usb), reconnect my datastore.
I would keep my vm's at 3.5 and upgrade them incrementally to 4.0.
This approach guarantees your vm's are not affected by the upgrade, and if you need to fall back, you can just by replacing the usb stick.