To upgrade to vSphere 4.0, upgrade hosts with service consoles to ESX 4.0 (which also has a service console). Upgrade hosts without service consoles to ESXi 4.0 (which does not have a service console). You cannot use the upgrade tools to convert ESX hosts to ESXi hosts, or the reverse.

VMware provides the following tools for upgrading ESX/ESXi hosts:

vSphere Host Update Utility

Graphical utility for standalone hosts. Allows you to perform remote upgrades of ESX 3.x/ESXi 3.5 hosts to ESX 4.0/ESXi 4.0. vSphere Host Update Utility upgrades the virtual machine kernel (vmkernel) and the service console, where present. vSphere Host Update Utility does not upgrade VMFS datastores or virtual machine guest operating systems.

vCenter Update Manager

Robust software for upgrading, updating, and patching clustered hosts, virtual machines, and guest operating systems. Orchestrates host and virtual machine upgrades. If your site uses vCenter Server, VMware recommends that you use VMware Update Manager instead of vSphere Host Update Utility. See the vCenter Update Manager Administration Guide.