As you may already know with the introduction of vSphere 4.1 vCenter now requires a 64bit OS, this may add complexity to your upgrade to vSphere 4.1 compared to previous updates.
VMware provide a very comprehensive document on the procedure which can be found here >> http://www.vmware.com/pdf/vsphere4/r41/vsp_41_upgrade_guide.pdf I highly recommend your read through this document, I am not going to copy its contents here more point out points of interest and guide you in the direction of some KB articles that may assist you along the way.
- Ensure you pay specific attention to the prerequisites listed on page 22 of the document above.
- If you are moving from a version prior to vCenter 4, the supported databases have changed, SQL 2000 is no longer supported and Oracle 9i is no longer supported.
- Ensure you or your DBA has full access to the database, ensure you know the passwords for the account used to connect to the database and ensure a backup is taken of the vCenter database before proceeding.
- If you are using a Microsoft SQL database ensure you install the SQL Native Client driver on your new vCenter server, it can be downloaded here >> http://www.microsoft.com/downloads/en/details.aspx?FamilyID=d09c1d60-a13c-4479-9b91-9e8b9d835cdc&displaylang=en
- For SQL databases ensure that your database login has DBO rights for the vCenter database and the MSDB database, the MSDB database permission is only required during the upgrade.
Before starting the upgrade you may wish to run the vCenter agent pre-upgrade check tool, details of this tool can be found on page 28 of the above document, this will create you a report with links to KB articles for problems you may occur when the vCenter agent is being upgraded on the hosts.
VMware have included a data migration tool on the vCenter 4.1 installation media, this will take a lot of the pain out of the migration to the new 64bit host. Details of this tool can be found on page 33. Not only will this tool migrate all the settings, certificates, licences for your vCenter server but if you are using the SQL Express database for smaller installation it will also move the database itself. This goes for the Updade Manager as well as vCenter.
The data migration tool can be found in the datamigration folder of the vCenter 4.1 installation media.
You will need to extract the zip file held within and follow the instructions in the upgrade guide to complete the backup of data. Before beginning ensure your vCenter and Update Manager services are stopped on the server. Once completed you will move the folder to the destination vCenter, ensure you have created a 64bit DSN if you are using an external DB and then run the install.bat to move your configuration and at the same time upgrade to 4.1.
KB articles to be aware of
I have found the KB articles below of assistance during 4.1 upgrades, it maybe worth familiarising yourself with these potential problems prior to you upgrade.
Problem: Upgrading to vCenter Server 4.1 fails when the installer upgrades the database. You get an error that reads “Exception thrown while executing SQL script” whilst performing the upgrade. Check the VCDatabaseUpgrade.log in %temp% directory for more specific information of the error.
Article: http://kb.vmware.com/kb/1024449
Problem: Installing VMware Converter 4.2 fails with the error: Error 29454 Setup failed to register VMware vCenter Converter extension
Article: http://kb.vmware.com/kb/1025351
Problem: Installing VMware Update Manager 4.1 fails with the error: Error 25085
Article: http://kb.vmware.com/kb/1024795
Problem: Moving the vCenter SQL Database
Article: http://kb.vmware.com/kb/7960893
Problem: Migrating vCenter Server to a different host machine
Article: http://kb.vmware.com/kb/5850444
Virtualised Reality 
The migration tool/process can be problematic. See this link for how to resolve issues with SQL related to migrating the db to a new install of VCenter 4.1:
http://nxwiki.blogspot.com/2010/08/vcenter-migration-error-db-logs-hresult.html
This is also a good reference:
http://blog.vmpros.nl/2010/08/10/vmware-migrate-vcenter-4-0-database-to-new-vcenter-4-1-server/
does it make sense, to install a complete fresh install on a new host? i should upgrade our whole view environment.