I'm getting the error "migration will cause the virtual machine's configuration to be modified, to preserve the cpu feature requirements for its guest OS". Is it safe to migrate a vm to the newer version esx also will we be able to move it back to 3.5 (non-update 4) after we move it to update 4?
yes, you will be able to migrate back and forth.
that message is a warning, but safe to ignore.
Is it also safe to assume we will be able to migrate back if we need to? (thats my main question)
yes, you will be able to migrate back and forth.