I just saw this very useful article from VMware KB.

Purpose

This article provides a method to limit the disk I/O from a specific virtual machine in vSphere Client 4.1. For alternative methods, see Additional Information.

Resolution

To manually configure disk I/O limits for a virtual machine:

1. Power off the virtual machine in preparation for changing the configuration parameters.
2. Locate the virtual machine in the vSphere Client inventory.
3. Right-click the virtual machine and select Edit Settings.
4. Click the Resources tab.
5. Select Disk, and enter the desired IOPs value under Limit – IOPs for each disk. By default, this is set to Unlimited.
6. Start the virtual machine. The virtual machine I/O is limited to the specified values.

Impact/Risks

All limit values are consolidated per virtual machine per LUN.

Example 1
Virtual machine with 4 virtual discs: all virtual discs located on one LUN. Each virtual disk IOPs set to 100 IOPs.

As each disc is limited100, the total IOPs for the datastore is 400 IOPs, i.e. if disc 1, 2 and 3 issue 10 IOPs each, disc 4 could issue 370 IOPs without being restricted.

Example 2
Virtual machine with 4 discs: discs 1 and 2 on LUN A , discs 3 and 4 on LUN B. All limits are set to 100 IOPs per disc.

In this case the IOPs would be consolidated to 200 IOPs to LUN A and 200 IOPs on LUN B and same as above applies if one of the discs does not issue all its given IOPs.

Example 3
Virtual machine with 4 virtual discs: all virtual discs located on one LUN. One disk is set to Unlimited, all other disks are set to 100 IOPs.

In this case, as one of the disks on the LUN is set to Unlimited, the IOPs for the LUN will also be Unlimited for that datastore.