I have an ESX 3.5. After adding it to the VC i was getting an error message "The VMware ESX doesnot have a persistent storage". I think its because the VMFS partition has not been created during the ESX installation. Is there a way by which i can create the VMFS partition on the same ESX box.
Try this article: http://www.vmwareinfo.com/2008/10/creating-local-disk-vmfs-manually.html
The complexity of the task is going to depend on if you have partitioned and formatted all of your local space for ESX. If you haven't left any for VMFS, it'd probably just be easier to reinstall ESX. In the event that you are running ESXi on a thumb drive and don't have harddrives or a compatible controller, you will have to run your storage elsewhere (eg freenas, openfiler, NFS share)