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Vmware has recently released Update 2 for VI 3.5. Are there any new features? Yes, there are! Let's take a quick look.
Here's some of the new features:
VMware High Availability (HA)
VirtualCenter
2.5 update 2 adds full support for monitoring individual virtual
machine failures based on VMware tools heartbeats. This release also
extends support for clusters containing mixed combinations of ESX and
ESX Server 3i hosts, and minimizes previous configuration dependencies
on DNS.
VirtualCenter Alarms

VirtualCenter
2.5 Update 2 extends support for alarms on the overall health of the
server by considering the health of each of the individual system
components such as memory and power supplies. Alarms can now be
configured to trigger when host health degrades.
Hot Virtual Extend Support

The ability to extend a virtual disk while virtual machines are running is provided. Hot extend is supported for vmfs flat virtual disks that do no have snapshots opened in persistent mode.
Guided Consolidation Enhancements
Guided
Consolidation now provides administrators with the ability to filter
the list of discovered systems by computer name, IP address, domain
name or analyzing status. Administrators can also choose to explicitly
add physical hosts for analysis, without waiting for systems to be
auto-discovered by the Consolidation wizard. Systems can be manually
added for analysis by specifying either a hostname or IP address.
Multiple hostnames or IP addresses, separated by comma or semi-colon
delimiters, may also be specified for analysis. Systems can also be
manually added for analysis by specifying an IP address range or by
importing a file containing a list of hostnames or IP addresses that
need to be analyzed for consolidation. Guided Consolidation also allows
administrators to override the provided recommendations and manually
invoke the conversion wizard.
Live Cloning of Virtual Machines
VirtualCenter
2.5 Update 2 provides the ability of creating a clone of a powered-on
virtual machine without any downtime to the running virtual machine.
Therefore, administrators are no longer required to power off a virtual
machine in order to create a clone of it.
Windows Single Sign-on Support
You can now automatically authenticate to VirtualCenter
using your current Windows domain login credentials on
the local workstation, as long as the credentials are valid on the VirtualCenter
server. This capability also supports logging in to Windows using
Certificates and Smartcards. It can be used with the VI
Client or the VI Remote CLI to ensure that scripts written using the
VI Toolkits can take advantage of the Windows credentials of
your current session to automatically connect to VirtualCenter.
Windows Server 2008 support
Windows Server 2008 (Standard, Enterprise, and Datacenter editions) is supported as a guest operating system. With VMware memory overcommit technology and the reliability of ESX Server, you can maximize virtual machine density with this new guest operating system to achieve the highest ROI. Guest operating system customizations and Microsoft Cluster Server (MSCS) are not supported with Windows Server 2008.
Enhanced VMotion Compatibility
Simplifies VMotion compatibility issues across CPU generations. Enhanced VMotion compatibility (EVC) automatically configure server CPUs with Intel FlexMigration or AMD-V Extended Migration technologies to be compatible with older servers. After EVC is enabled for a cluster in the VirtualCenter inventory, all hosts in that cluster are configured to ensure CPU compatibility for VMotion. VirtualCenter does not permit the addition of hosts that cannot be automatically configured to be compatible with those already in the EVC cluster.
Storage VMotion
Storage VMotion from an FC/iSCSI datastore to another FC/iSCSI datastore. This support is also extended on ESX Server/ESX Server 3i 3.5 Update 1.
VSS quiescing support
When creating quiesced snapshot of Windows Server 2003 guests, both filesystem and application quiescing are supported. With Windows Server 2008 guests, only filesystem quiescing is supported. For more information, see the Virtual Machine Backup Guide and the VMware Consolidated Backup 1.5 Release Notes.
Read all about it in the release notes . Thanks to ICT Freak for the screenshots!
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I can't believe I'm the first one to post this - If this is true, there's a serious issue with this update! I haven't researched it fully yet.
http://blog.scottlowe.org/2008/08/11/apparent-datetime-issue-with-update-2/
It is true. It's all over the blogosphere.