In the VMware Communities an issue with ESXi 5.0 Update 1 was reported that is important for everyone who uses the free (VMware vSphere Hypervisor) version of ESXi 5.0: Apparently VM autostarts do not work anymore after installing Update 1 if the host runs with a free license. The VM autostart function will automatically power on a defined list of VMs in a defined order when the system boots. This is probably used by a lot of people who run standalone ESXi hosts with the free license.
I was able to reproduce this issue in my home lab, and currently there is no workaround or solution. So if you rely on this functionality then you should postpone the installation of Update 1 until a fix for this is released. If you have already installed Update 1 and want to make it undone due to running into this issue then you can roll back to the previous installation (without Update 1) by pressing Shift-R at the ESXi boot prompt.
Update (2012-07-14): VMware has released a patch for ESXi 5.0 on July 12th that fixes this problem.