Thanks Scott. I agree that it is a bit of a hassle. And I also would lean toward mirroring instead of clustering. Looking forward to the advancement in that area with SQL 2012.

Here is a link to the VMWare knowledgebase article that lists all versions of vSphere with links to the PDFs with instructions for setting up Failover Clustering and all the caveats. It does list Fault Tolerance and vMotion as not being supported. I've never tried to vMotion one of my clustered SQL VMs but I imagine if it even works it could cause a failover event because of the sensitive nature of the cluster (keepalives). Performing a manual failover of the cluster and then shutting down the passive VM would be the way to go.

Here is a link to a Microsoft blog laying out the "Guest Clustering" from their side.

Steve