The new 500gig drive back from warranty will house the ESXi VMs.

The current 1Tb drive that houses the ESXi VM’s and the current 1Tb drive from my workstation will be moved to the Nas4Free file server in a RAID 1 (mirror) array.

The workstation gives up it’s 1Tb data drive which gets replaced with the two 500mb 2.5″ drives. Since they will be used as data drives, read/write performance isn’t as important, and the 5400rpm 2.5″ drives should be just fine for storing in progress photos/videos/other stuff.

Moving data from one drive to another on the ESXi server can be accoplished with something like this:
http://www.stormagic.com/SvSAN_download.php