vSphere 4.1 at the moment, we have maintenance licenses to go to 5 but there's other things that need doing first so not upgrading yet. We're on the Essentials Plus bundle so it's a paid version but we use the ESXi kernel, you have no choice in 5 anyway so made sense to go straight to it and save on HD costs for the VM hosts.
Granted Hyper-V is thrown in with Windows (we do the same with the Datacenter licenses, 6 licenses covers our 3 x dual-cpu hosts on EES) but I didn't want to worry about a) drivers and b) Windows Updates on my host machines... for what it cost in the grand scheme of the project I'd say vSphere been worth it thus far :)
I agree VMware need to do something about educational licenses but then it doesn't actually increase usage in there products (like most of the M$ desktop stuff would) as 95% of there products are used in the back end production.
Perhaps we should try and get somebody from VMware @ the next Edugeek conference and grill them?
I do have a slight bias because i work for a VMware Partner but when you at the later firewall products which have just been released such as the Watchguard they tend to only support runnning on VMware - Which then means that you loose the ability to move more items into a HA cluster on your Virtual Platform.