I've a small virtual lab set up for testing and yesterday I connected to my vCenter Sever through vClient and tried using VSC Provisioning to create an iSCSI datastore on my DOT 7.3.6 Simulator. Some initital steps are successfult but when it comes creating the VMFS datastore, ESX reports "In Progress" and it stays like that indefinitely. I tried creating and mapping a LUN from storage side in order to attach it without the use of VSC but it's the same.
I thought I would try a simple test by connecting a LUN to a test Server 2008 VM, from a different Simulator on the same ESXi host.
When it came down to the final step, management console reported formatting the new partition - and appeared that it hanged. But in the end, some 10+ minutes later, it managed to format a 200MB disk. It's freakishly slow, even for a test lab.