See page 5 in the PDF that Andre recommended ... http://www.vmware.com/files/pdf/techpaper/VMFS-5_Upgrade_Considerations.pdf
Considerations – Upgrade or Create New
While a VMFS-3 which is upgraded to VMFS-5 provides you with most of the capabilities as a newly created
VMFS-5, there are some differences. Both upgraded and newly created VMFS-5 support single-extent volumes
up to 64TB and both support VMDK sizes of ~2TB, no matter what the VMFS file-block size is. However
additional differences, although minor, should be considered when making a decision whether to upgrade to
VMFS-5 or create new VMFS-5 volumes.
No Uniform Block Size
VMFS-5 upgraded from VMFS-3 continues to use the previous file-block size, which may be larger than the
unified 1MB file-block size. This can lead to stranded/unused disk space when there are lots of small files
on the datastore.
No New Sub-Block Size
VMFS-5 upgraded from VMFS-3 continues to use 64KB sub-blocks and not the new 8KB sub-blocks. This can
also lead to stranded/unused disk space. The upgraded VMFS-5 also continues to use the original number of
sub-blocks from the VMFS-3.
No Increase to the Maximum Number of Files per Datastore
VMFS-5 upgraded from VMFS-3 continues to have a file limit of 30,720 rather than new file limit of > 100,000
for newly created VMFS-5. This has an impact on the scalability of the file system.
Uses MBR
VMFS-5 upgraded from VMFS-3 continues to use MBR (Master Boot Record) partition type; when the VMFS-5
volume has grown beyond 2TB, it automatically and seamlessly switches from MBR to GPT (GUID Partition
Table) with no impact on the running virtual machines.
Starts on Sector 128
VMFS-5 upgraded from VMFS-3 continues to have its partition starting on sector 128. Newly created VMFS-5
partitions will have their partition starting at sector 2048.
Conclusion
As you do not get the complete set of enhancements when upgrading a VMFS-3 to a VMFS-5, VMware
recommends using newly created VMFS-5 volumes if you have the luxury of doing so. You can then seamlessly
migrate the virtual machines from the original VMFS-3 to VMFS-5 using vSphere Storage vMotion. If you do not
have the available space to create new VMFS-5 volumes, then upgrading VMFS-3 to VMFS-5 will still provide
you with most of the benefits that come with a newly created VMFS-5.