Error: Virtualized Intel VT-x/EPT is disabled for this ESX VM. You will only be able to run 32-bit nested VMs

I have a HP DL380 G5 test server with 8GB RAM and two Intel Xenon dual-core 5160 - 3.0Ghz processors installed.

Virtualization Technology is enabled in the server"s BIOS.

The server is running Windows 2003 Enterprise Edition and I have VMware 8.1 installed.

When I try to install ESXi 5.0 in VMWare Workstation I get the following error:

"Virtualized Intel VT-x/EPT is disabled for this ESX VM. You will only be able to run 32-bit nested VMs."

Within the Virtual Machine settings I set the Number of Processorts to 2 and the Number of Cores per Processors to 1.

I have enabled "Intel VT-x or AMD-V" as the preferred mode and selected "Virtualized Intel VT-x?EPT or AMD-V/RVI but I get the same message.

I am not sure if the Intel Xeon dual-core processsor 5160 - 3.0Ghz supports EPT and was wondering if I am hitting a barrier with the hardware I am using.