Since VMWare cert is rather expensive it hasn't been done yet. We're running Open-E with VMWare 3.01 using QLogic 4050 iSCSI HBA's.

So far good, we've been running it for about 3 months now. We use the boot from SAN option that the QLogic cards afford and all our VM Hosts run diskless.

I can't really speak to whether it is 'flawless' as three months isn't particularly extensive but it seems to be working great and I know that there are many from my searching who use the Linux iSCSI target (IET) software and have had good luck with it.