Thanks for the reply Matt,
Yes, it does fully support VT. I am using Vmware ESX 4.1, I have tried it on the 4.0 also. The ESX does install successfully but the x64 bit VM's does not start inside that ESX saying the VT is not enabled in the BIOS whereas the VT is fully enabled inside BIOS.
Here are the answers:
1. Yes, I am running Vmware ESX inside the Workstation 7.0. The screenshot attached 'Intel.jpg'.
2. Yes, all messages and errors are attached.
I have a small datacenter at home inside Vmware workstation where I have 2 ESX 4.0 running and few other machines including Virtual Center (Creating this virtual datacenter was the whole idea of buying this PC). The funny thing is everything was running perfect until few weeks back when suddenly the x64 bit machines stoped running and they did not power since then.
I have done almost all the troubleshooting but couldn't get this to work. And this is the reason I updated the BIOS thinking it might solve the problem.
Running ESX as a nested VM inside of VMWare Workstation 7.0 is supported (according to VMWare documentation) but only if the nested VM is 32-bit. You can read more about this on the VMWare communities site here: http://communities.vmware.com/docs/DOC-8970
Hope this helps!