@Sizbut, after you upload the VMDK file you have to copy it over to unpack it.
3.Copy the upgrade VMDK file to the first virtual machine that needs upgrading. This step is important for two reasons:
•! Important
This step is important. The process of copying within VMware expands the size of the VMDK file from 4.5GB to 200GB. The file cannot be used for the upgrade process until expanded.
[highlight #FCE94F]a.Select the uploaded upgrade VMDK file and click on the vmware_icon_copy copy icon.[/highlight]
b.Browse to the datastore folder with the same name as the virtual machine to be upgraded and click OK.
c.Wait until the process displays "Complete", indicating that the file has been copied and the copy inflated to 200GB. Note: The process also displays "100%" when nearly finished, however wait until "Complete" is shown.
4.You can now proceed with upgrading the virtual machine using the copy of the VMDK file. See Upgrading a VMware Virtual Machine.
I did this entire upgrade process in a lab environemt first and was good so I know what Im doing is correct.