With release of vSphere 5.1, You will be able to create a virtual Machine with Hardware version 9. So that you can utilize the new features of VM hardware Version 9 . VM hardware version is named as VM compatibility in vSphere Web Client. When you are creating a Virtual Machine in vSphere Web client , You will be provided with the 4 options to create a Virtual Machine Compatibility.Below are the 4 Compatibility Levels. If you choose a VM hardware version 7, This virtual Machine can be run on the ESX 4, ESXi 5.0 and ESXi 5.1 but it cannot be run on the older version of ESX/ESXi hosts like 3.0 and 3.5.

ESX 3.x and later (VM version 4)

This Virtual Machine (VM version 4) is also compatible with ESXi 4.x, ESXi 5.0 and ESXi 5.1. Some Virtual Machine hardware features are unavailable with this option.

ESX 4.X and later (VM Version 7)

This Virtual Machine (VM version 7) is also compatible with ESXi 5.0 and ESXi 5.1. Some Virtual Machine hardware features are unavailable with this option.

ESX 5.0 and later (VM Version 8)

This Virtual Machine (VM version 8) is also compatible with  ESXi 5.1. Some Virtual Machine hardware features are unavailable with this option.

ESX 5.1 and later (VM version 9)

This Virtual Machine (VM version 9) provides the best performance and latest version features in ESXi 5.1