I tried upgrading Vsphere from Version 5.0 Update 1 to 5.1, however when booting from the CD or Trying update manager i kept on getting the following error:
From CD
err no 39 directory not empty
From Update Manager
The update was failing after a short period.
After trying to follow the lenghty procedure on the vmware site, i decided to try and use update manager to bring the host up to the latest patch level.
Once the host was updated to the latest patch level, i tried to ESXi upgrade again, This time it worked on all hosts after they went trough the same patch level.
So if you encounter this error, try and bring your Vsphere server to the latest patch level, before trying the upgrade.