Just a note to self, based on the success from the info found at http://virtuallyhyper.com/2012/07/installing-kvm-as-a-virtual-machine-on-esxi5-with-bridged-networking/ (Which has a much more detailed description - so, if unsure, go and read there!)
1) ESXi 5.0 has the nested virtualization support but it is disabled by default.
SSH into the ESXi host and add the following line to /etc/vmware/config:
vhv.allow = TRUE
2) The guest config also needs edits to enable the nested virtualization. Add the below lines to the .vmx file: