I ran across a great post over at VMwareTips.com helping understand the Enhanced VMotion Compatibility (EVC) feature in VMware ESX 3.5 Update 2 and above.
VMwareTips Post: http://vmwaretips.com/wp/2009/03/31/vmware-enhanced-vmotion-compatibility-evc/
Useful VMware KB Articles about EVC: KB 1003212
The short story of it all is if you have the processors listed in the KB article and you enable EVC (VM Settings), then you’ll be able to VMotion your VM’s.