So when you connect the USB to your workstation where you are running the vSphere Client from you cannot browse the drive?
When you create the VM yoo can have the virtual cd-rom point to your local cd or browse to an ISO image on you local machine. Check out section 4 of http://pubs.vmware.com/vsphere-50/topic/com.vmware.ICbase/PDF/vsphere-esxi-vcenter-server-50-virtual-machine-admin-guide.pdf particularly starting on page 42
One thing also point out is your ESXi host will not be able to read from an NTFS volume -