You have to pay for vSphere with its various modules and extra features but not to use the vSphere Client to connect to a free ESXi.
I think where you may be getting the license message from is although ESXi is free, you still need to request a free license key from VMWare.
Login to your ESXi box with vSphere Client and go to Configuration -> Licensed Features -> Edit.
If you are set to evaluation mode, that is what you are getting the license warning from.
VMWare should have emailed you a license key when you signed up on their website to download ESXi. If not, you can go through the download steps again and the license key should be on one of the pages.
For me, if I go to https://www.vmware.com/products/esxi/ hit Download, login with my free VMWare account, then on the page with all of the download links, at the top of the list is my ESXi License.
The reason you are seeing the license message about vSphere is that in the Evaluation mode, some of the extra features that are only available with vSphere are enabled, once you enter a free ESXi license, those will be disabled and you won't get prompted anymore.
Also, you can use the vCenter Converter in the standalone mode (runs off of your workstation) for free with ESXi. This tool is immensely useful for moving VMs on and off of ESXi. http://www.vmware.com/products/converter/.
I'd give the Ultrium drive a dedicated 1-port internal SAS controller and skip trying to to leverage the existing P410 controller. This way, you can do passthrough SCSI to an individual VM (assuming your backup software will be running in a VM).
Best Answer
Sometimes the VMware HCL isn't just about whether something will work, but rather, does it makes sense? This server doesn't make sense...
But, ESXi compatibility really hinges on your array controller and NIC support. The chipset of the ProLiant DL320 G5 is supported. The processors may be capable. The NIC is supported. It really depends on whether you have an add-on PCIe Smart Array controller installed. The native Intel 82801GR storage controller is a "Fake RAID" controller, and won't be supported.
The details of your server matter in this case. Do you have more information?
Keep in mind that this is a low-end server... 2 drive slots, 8GB RAM maximum, one CPU... so even if compatible, the utility of this server as an ESXi host is low, given more modern options out there.