Install vSphere CLI (Command line group of applications and utilities)
The vSphere Command-Line Interface (vSphere CLI) command set allows you to run common system administration commands against ESX/ESXi systems from any machine with network access to those systems. You can also run most vSphere CLI commands against a vCenter Server system and target any ESX/ESXi system that vCenter Server system manages. vSphere CLI commands are especially useful for ESXi hosts because ESXi does not include a service console.
vSphere CLI commands run on top of the vSphere SDK for Perl. The vSphere CLI installer installs both the vSphere CLI and vSphere SDK for Perl.
To upgrade the ESXi server, launch a cmd and go the vSphere CLI
C:\Program Files\VMware\VMware vSphere CLI\ cd bin C:\Program Files\VMware\VMware vSphere CLI\bin>vihostupdate.pl --server vsphere3 -i -b "C:\VMWARE\vSphere\upgrade-from-ESXi4.0-to-4.1.0-0.0.260247-release.zip"
As you can see, the Update package is located on your PC
Here is a small overview of vSphere CLI