A good doc to look at would be url=http://www.vmware.com/pdf/vi3_upgrade_plan.pdfPlanning an Upgrade to VMware Infrastructure 3[/url], page 5 and page 10 with heading "Virtual Machine Relocation, In-place File System Upgrade." It has some high-level steps on what needs to be done.
Your steps would go as stated in the doc:
1) Relocate virtual machines from host using VMotion
2) Upgrade ESX Server host from 2.x to 3.0
3) Upgrade SAN datastore from VMFS2 to VMFS
4) Cold migrate virtual machines from ESX Server host to ESX Server host
5) Upgrade virtual machines from VM2 to VM3
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