I have some ESXi 4.1 update nothing hosts for which I followed the instructions here VMware KB: Creating a persistent scratch location for ESXi 4.x and 5.x to configure a scratch partition so logs are retained across reboots. I could see 9 messages.gz files in the log directory, there were a few dated last month, I rebooted the host and then there are still 9 .gz files but all with todays date. Also now when I look at the Events tab on the vSphere client on this host there are no events before the reboot.
Does this make sense, shouldn't they events be retained now that I have a scratch partition?