Question : Problem: Virtual Host data drives with ESXI and Dell Equallogics San

Hello,
We just purchased a Dell Equallogics PS5000e 4tb Iscsi San and are looking to get are current ESXI VM hosts onto the San.
      We currently just have one ESXI server that host about 4 vms on Directed attach storage.  500gb raid 5.  All the data and OS are in a VMDK now on one datastore.
      The goal is to move all those VMs to the equallogics and also have any new VMs stored on the SAN.  We dont have a good backup method now so moving the VMs to the san would allow us to use the VM snapshot manager from Equallogics.

My question is what is best practices for setting up ESXI on the iscsi san.  What is the best way to represent data drives in a host?
1)      Do I create a volume on the Equallogics and then a data store and store my VMs and data in a VMDK.  Same as I do now but it stored on the San and not on Direct attach storage?
2)      Do I create a volume and a Datastore and have only the VMs C: Drive in the VMDK and use the MS initiator for data drives (D and others)?
3)      Is there another way to set this up?

I want to be able to have a good way to backup and restore data and be ready to use all the features of esxi later if we choose to upgrade. (Vmotion, vcb etc&)

Answer : Problem: Virtual Host data drives with ESXI and Dell Equallogics San

In computer storage, a logical unit number or LUN is simply the number assigned to a logical unit. A logical unit is a SCSI protocol entity, the only one which may be addressed by the actual input/output (I/O) operations. Each SCSI target provides one or more logical units, and does not perform I/O as itself, but only on behalf of a specific logical unit.

More info - http://en.wikipedia.org/wiki/Logical_Unit_Number

The hierarchy is

Physical HDDs -> RAID -> SAN -> LUN