From: http://www.vm-help.com/
In the last few updates VMware has changed which drivers get loaded for certain SATA controllers (in particular the ICH7 / ICH9 / ICH10 models). This has been done to fix a problem that prevented host CD-ROMs from being used within a VM. However, in some cases after upgrading a user might find the below error after rebooting for the first time after the firmware upgrade has been installed: The VMware ESX Server does not have persistent storage. As shown in the below image, the ICH9 controller is now recognized as an IDE controller after updating to Update 4 instead of a SATA controller as was the case with ESXi 3.5 Update 3. For another method to resolve, check out this thread.
Read the rest of the article here: http://www.vm-help.com/esx/esx3i/no_persistent_storage_after_upgrade.php
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