A. The ESX Server hosting the vApp must in a DRS-enabled cluster.
B. The ESX Server can be a standalone host or reside in a DRS Cluster.
C. The ESX Server can be version 3.0 or later.
D. The ESX Server must be version 4.

If you picked answer D, Read on… If you picked answer C, give yourself a glass of Milk and a Gold Star!

I received an enquiry to this question early this morning, and like many people on Twitter who shall remain nameless, i assumed that the answer would be D because the feature only became available with vSphere 4.  Someone else who originally agreed with us, saying that vApps can only be created on ESX4 was a fellow blogger Markus Gehm who runs the VMBlox.com Blog. After about 15 mins he replied again with the following message.

@Simonlong_ Tested it after I wrote you and have to say sorry, I can create one on a 3.5 Host, seems to be a vCenter thing.

So it seems like vApps depends on vCenter 4 and not ESX4. I got Markus to take a screenshot for me.

As you can see in the screenshot, the Host which has a vApp running on it is an ESX3.5 Host. Markus assures me that he is using vCenter 4.

VMware vApps are reliant on you using vCenter 4 and not ESX4.

Thanks to everyone who replied to me via Twitter.