Re: We need to migrate 200 Windows XP/Windows server 2003 VM’s from one vCenter (say vCenterA vSphere 4.0) to another vCenter (vCenterB vSphere 5.0)

No, the right sequence is to first upgarde the VMware Tools and then the hardware version.

Otherwise you risk loosing the network settings on the Windows VMs.

But you can move the hardware version upgrade also out of the main loop and exeute these in a separate loop after the VMware Tools upgrade