1. EVC (Enhanced VMotion Compatibility) This allows you to live migrate your VM’s between different generations of CPUs from the same vendor. Basically you need Intel’s Merom (or newer) processor or AMD’s Rev.E (or newer) Based Processor.  The official list can be found here .
2. New guest operating system support: Windows Server 2008, Solaris 10 U5, SUSE Linux Enterprise Server 10 SP2, and Ubuntu 8.04.  Customers are always happy when we expand the supported OS list, some don’t even wait for us to try a new OS out.  However, if you call in for support, the guest OS needs to be on the supported list .
3. Storage VMotion to iSCSI and FC.  You can now live migrate VM’s on storage (move where the VM’s are stored) from one datastore to another on either (or both) of the storage platforms.
4. Hot virtual disk extend.  You can now entend a virtual disk drive while the VM is running from the GUI.  Just edit the VM’s hard disk config while the VM is running to the max allowed by the datastore.
5. VSS quescing support.  The VCB (VMware Consolidated Backup) agents now allow for VSS integration so when you take a backup of a Server 2003 VM, VCB will quiesce the data from the app (like SQL and Exchange) and then have ESX quiesce the disks and then take a nice clean VM snapshot.  Which then can be backup by the backup agents on the VCB backup proxy.  This give a more consistant snapshot image to work with.

Those are some of the main features added in U2.  If you are not ready to go up to ESX 3.5 Update 3, Update 2 should be on your radar.  The licensing bug is no more and, in my opinion, the list of features warrants considering it during your next patch cycle.

1. The vCPU limit per core has been raised from 8 (or 11 with VDI) to 20.  This means that you can run vCPU’s 20x the number of cores in a box to a host limit of 192 vCPU’s today or 170 VM’s, whichever comes first.
2. Guest operating system support added for Solaris 10 U5, Ubuntu 8.04.1, and RHEL 4.7.  New OS support is always good for customers and always something I get asked about.
3. Numerous hardware additions to the HCLs .

Great stuff added, of course I understand some customers are not on the bleeding edge and hold off before updating which I completely understand (especially after the licensing bug).  For those customers, watch for a follow up post on the benefits of Update 2 (which was huge).  Now may be the time to consider Update 2 for rollout if you have not already.