We had the same issue. Upgrading from 5.1.0a to 5.1.0 update 1a on a Microsoft Windows 2008 R2 server. The SSO upgrade failed with the "Insert Disk 1" error. After cancelling, we were unable to re-run the upgrade program.
Our solution is as documented above:
1) Implement KB 2052738 - Rename all the directories that were renamed because of the vSphere update operation stopping the SSO service and renaming these directories.
C:\Program Files\VMware\Infrastructure\SSOServer\lib
C:\Program Files\VMware\Infrastructure\SSOServer\thirdparty-license
C:\Program Files\VMware\Infrastructure\SSOServer\utils\lib
C:\Program Files\VMware\Infrastructure\SSOServer\utils\jars
C:\Program Files\VMware\Infrastructure\SSOServer\utils\bin\windows-x86
C:\Program Files\VMware\Infrastructure\SSOServer\utils\bin\windows-x86_64
C:\Program Files\VMware\Infrastructure\SSOServer\webapps\ims\WEB-INF\lib
C:\Program Files\VMware\Infrastructure\SSOServer\webapps\sso-adminserver\WEB-INF\lib
2) Copy all the files from the installation DVD onto a local temporary file folder - make sure that the folder path\name does not contain any spaces in it.
3) Re-run the SSO upgrade (make sure you are using "run as Administrator")
Success.
Gene