Are you using shared storage or vCenter? If you don't have vCenter you might consider Essentials package. If you have vCenter you could join the new host (vCenter would have to be at version 5.1), then shutdown a VM, rightclick and select Migrate.
If you don't have vCenter you might consider using VMware Converter http://www.vmware.com/products/converter/overview.html. You would install it on a workstation, and then point it at the 3.5/4.0 host as the source, and the 5.0 host as the destination for a VM.
Once the VM was migrated you'll want to upgrade VMware Tools and you can also upgrade the virtual machine hardware version (right click on the VM while it is powered off).