Is is possible to set up ESXi or more expensive ESX server as a storage target (FCoE, ISCSI or NFS, in that order) for other ESX servers? If so, how?
One solution would be to set up a VM guest on the ESX / ESXi server running something like openfiler which is a linux based open source storage server
It can be downloaded from http://www.openfiler.com/ and supports iSCSI and NFS - not sure about FCoE
You can install Openfiler or FreeNAS or similar project and pass whole physical hard drive(s) to this virtual machine (VMWare Raw Disk Mapping - RDM). Then you can easily configure Openfiler as FCoE Target or iSCSI target or NFS Server.
You can configure your ESXi manually.
and then edited the servername.vmx to include the following lines:
Here is complete HOWTO configuration Openfiler as iSCSI target for ESX/ESXi.