Make a full backup of the vCenter database.
Make sure that you have the following permissions:
Grant the System DSN user of the vCenter Database db_owner privileges on the vCenter database.
Grant the System DSN user of the vCenter Database db_owner privileges on the MSDB database.
Note: The db_owner privileges on the MSDB database are required for installation and upgrade only.
Ensure that your ODBC System DSN is using the proper driver.
Microsoft SQL must use the SQL Native Client driver.
Stop the vCenter service. This step is recommended, especially if the vCenter database is on a remote system.
Click Start > Control Panel > Administrative Tools > Services > VMware VirtualCenter Server.
Log in to your vCenter Server with a Local Administrator account on your Windows system to run the upgrade.
Ensure no processes are running that conflict with the ports that vCenter uses.
Configure new vSphere 4.0 licences.