Not sure when I came across this, and how late to the game I am on it, but alas, cleaning out my Firefox tabs today I came across a deployment diagram for the Nexus 1000v on ESX4:
Some key observations of importance:
* The version of ESX running here is ESX 4.0 (not yet released)
* The Nexus 1000V software on the physical server acts like a line card of a modular switch, described as a VEM (virtual ethernet module)
* The Nexus 1000V VEM is a direct replacement of the VMWare vSwitch function
* The Nexus 1000V VSM (virtual supervisor module) acts like the supervisor engine of a modular switch
* One Nexus 1000V VSM instance manages a single ESX cluster of up to 64 physical servers
* The form factor of Nexus 1000V VSM can be a physical appliance or a virtual machine
* The network administrator manages the Cisco Nexus 1000V (from the VSM) as a single distributed virtual switch for the entire ESX cluster
* Each virtual machine connects to its own Virtual Ethernet (vEthernet) port on the Nexus 1000V providing the network administrator traffic visibility and policy control on a per virtual machine basis. Virtual machines can now be managed like physical servers in terms of their network connectivity.
Original post here.