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.
You could always use the software initiator.. Vmware uses the Cisco one currently, and this is supported via Open-E DSS.
We have been using this since the very first release of DSS server last year. Using shared Luns to house VM's works fine, as does having Dedicated Luns for each ESX Host server.
Not iscsi related but see below...
The only part i have not had full success with yet is using the Fibre channel Target support, with qlogic HBA's, this function was introduced with 1.21... When it is working will be a great addition full Fibre san with open-e..
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