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:
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.