Note that you cannot power on the guest from VSphere, you must do it while logged directly into the host.
To create the installation media I used an external USB hard drive and Lion Disk Maker with the Mountain Lion InstallESD.dmg
If you need good all purpose drive, check out the USB powered Seagate GoFlex drives.
Attach the external hard drive to the ESX host.
Create a new VM and select "Other" on the OS selection and choose Apple Mac OS X 10.7 (64-bit). Choose only 1 CPU/core and leave everything else at the defaults and start the VM.
When the VM starts, edit the Guest settings and attach the USB hard drive to the guest. Use the menu to send ctrl-alt-del and the guest should now boot the installation media.
Wait for several minutes. Eventually you'll reach the Welcome screen, but you won't be able to click anything. I'm not sure if it's frozen or you cannot actually click anything, but try to click the next button a few times and then wait for close to 10 minutes. Eventually it will move on to the next screen and you'll be able to proceed with the installer.
You'll need to first launch the disk utility and partition the disk, then proceed with the installer as normal. The installer hung on 3 minutes remaining for about 30 minutes on my install but eventually it finished.
Upon first boot it hangs at the Apple logo with the spinner. You can boot into the guest bios and then go into the EFI shell and boot with -v. There are no error messages but it hangs at macx_swapon SUCCESS for 10 minutes, then displays DSMOS has arrived and goes no further.
To boot into verbose mode, enter the guest bios, go to the boot manager, launch the EFI shell. Determine the correct storage device and do: