I recently needed to update an ESXi 4.0 host to ESXi 4.1. After discovering that the host update utility was not supported with ESXi 4.1, I resorted to my other option, the vSphere CLI.
Here's the session (on Windows 7 64bit):
C:\Program Files (x86)\VMware\VMware vSphere CLI>bin\vihostupdate.pl --server my_server -b upgrade-from-ESXi4.0-to-4.1.0-0.0.260247-release.zip -i
Please wait patch installation is in progress ...
The update completed successfully, but the system needs to be rebooted for the changes to be effective.
Followed by a reboot:
C:\Program Files (x86)\VMware\VMware vSphere CLI> bin\vicfg-hostops.pl --server my_server -o reboot
Host my_server rebooted successfully.