1. Download the vSphere CLI, and the ESXi upgrade file you need from vmware.com.(~200MB)
(install the CLI, and save the ESXi update file as c:update.zip)
2. Place the ESXi host in Maintenance Mode and either power off or migrate all VMs on the host
3. Launch the vSphere CLI. (Start -> All Programs -> VMware -> VMware vSphere CLI -> Command Prompt)
4. type cd bin
5. Enter this command:

## For ESXi 4.x to 5.0:
vihostupdate.pl -b c:esxiupdate.zip -url https://SERVER_NAME_OR_IP/sdk/webservice -i

## For ESXi 5.0 to 5.0.x:
esxcli --server=SERVER_NAME_OR_IP software vib install --depot="[DATASTORE_NAME]esxiupdate.zip"

Provide the root account username and password when prompted.
After the install completes, you will be instructed to reboot your ESXi Host.
After your host comes back, exit maintenance mode, and start up your VMs

**UPDATE for ESXi 5.0 machines**

ESXi 5.0 uses a single installer wizard for fresh installations and upgrades.
ESXi 5.0 also provides a new option for deploying ESXi directly into the host
memory with vSphere Auto Deploy. The vihostupdate and esxupdate utilities
are not supported for ESXi 5.0. You cannot upgrade or migrate to ESXi 5.0 by
using any command-line utility. After you have upgraded or migrated to
ESXi 5.0, you can upgrade or patch ESXi 5.0 hosts using vCLI esxcli commands

such as:

Install all new VIBs from a ZIP file on the target server, copied into a datastore
esxcli --server=SERVER_NAME_OR_IP software vib install --depot="[DATASTORE_NAME]esxiupdate.zip"

##IMPORTANT##
After you upgrade or migrate your host to ESXi 5.0, you cannot
roll back to your version 4.x ESX or ESXi software. Back up your host before
you perform an upgrade or migration, so that, if the upgrade or migration fails,
you can restore your 4.x host.