This page documents the process to update ESXi from version 3.5 to 4.0 if you have a standalone host or do not use vCenter Update Manager. After you have completed the firmware upgrade, you should also upgrade the virtual hardware version of your VMs as shown at the bottom of the page and also upgrade VMware Tools. Upgrading the virtual hardware version will allow you to take advantage of new VM features like 10 virtual NICs per VM, IDE virtual hard drives and VMDirectPath.
This procedure to upgrade an ESXi host from version 3.5 to 4.0 requires version 4.0 of the VMware vSphere client. Typically the vSphere client is installed after your ESXi host is installed. if you don’t have an existing install of the vSphere client v 4.0 you can extract it from the ESXi 4.0 upgrade ZIP package (VMware-viclient.vibdata.tar.gzdata.tar.4.0.0clientVMware-viclient.exe) as shown in the below image.