Earlier i wrote about how to extend you virtual disk , although I have not been able to test , verify this new feature myself, from the documentation provided, it looks like ESX Server 3.5 Update 2 provides hot virtual extend support.
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 without snapshots opened in persistent mode
http://www.vmware.com/support/vi3/doc/vi3_esx35u2_vc25u2_rel_notes.html#whatsnew
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