If you want to perform an offline upgrade of an ESX 3.x host to the new vSphere  host there are a few ways.

Using a DVD:

/root/esxupgrade.sh storage1

Using the DVD ISO:

esxupgrade.sh -i /vmfs/volumes/storage1/esx4.iso /vmfs/volumes/storage1

storage1 – should be a VMDK local datastore attached to the host.
storage1 – should be at least 8.4GB in size.

Read the full guide here.