The upgrade from VMFS3 to VMFS5 is a matter of seconds and can be done online.
Before you start upgrading, please ensure all components (host, storage) are supported (see VMware Compatibility Guide) by the new version, to not run from one issue into another!
Basically the first step is to upgrade vCenter Server (ensure interoperability with the hosts at VMware Product Interoperability Matrix), followed by the ESXi hosts. Once all hosts are running ESXi5 you may upgrade the datastore (Configuration -> Storage) by clicking the "Upgrade to VMFS5..." link. Once upgraded you should be able to increase the datastore (maximum is ~64TB). In your case, increasing the datastore will reconfigure the LUN's partition type from MBR to GPT. I didn't have the chance to try this myself yet, so please double-check with the documentation whether there's something you need to take care of in this case. I strongly suggest - although I think this should work flawlessly - you ensure that you have an up-to-date backup!
André
