Steps of Vmotion

1. The first step is to ensure that the source VM can be operated on the chosen destination server.
2. Then a second VM process is started on the target system and the resources are reserved.
3. Next a system memory checkpoint is created. This means all changes to the source VM are written to an extra memory area.
4. The contents of the system memory recorded at the checkpoint are transferred to the target VM.
5. The checkpoint/checkpoint-restore process is repeated until only the smallest changesets remain in the target VM’s memory.
6. The CPU of the source VM is stopped.
7. The last modifications to the main memory are transferred to the target VM in milliseconds.
8. The vMotion process is ended and a reverse ARP packet is sent to the physical switch (important: Notify Switches must be activated in the properties of the virtual switch). Hard disk access is taken over by the target ESX.
9. The source VM is shut down. This means the VM process on the source ESX is deleted.

One additional comment about what the vMotion checkpoints record:

• all devices and their status
• CPU registers
• main memory contents
• a serialization of the status for transmission over the network

As you can see vMotion is concerned mostly with the transfer of the main memory contents from one ESX server to another, with a final notification telling the physical network about the new interface over which the VM  is reachable sent once the process is finished. The guest system of course does not notice anything.