Just in case someone else can use this info, I successfully expanded an iscsi san volume without much trouble. No reformatting on the ESX side. Here are the specs:
2 esx 3.5 hosts
The latest Openfiler (1.1?) san with a 37 GB extended partition
$30 Belkin 5 port GB switch (for vmotion)
Started with a 15 GB iscsi volume (I'd say partition, but OF refers to volumes)
Added 10 GB to that volume
This is a test environment, so that's why there isn't a ton of space. Openfiler doesn't allow an iscsi volume to be resized from their web gui, so I opened an SSH session, changed to SU and executed the lvextend command "lvextend -L + 10G /dev/iscsi_1/vmotion" where iscsi_1 is the volume group name and vmotion is the volume name. Openfiler picked up this change immediately (as you would expect).
The ESX side is where I expected to have trouble because I thought a complete reformat of the vmfs volume seen over iscsi would have to be reformatted. In fact, a warning pops up during the process that indicates data will be wiped out. HAVE A BACKUP JUST IN CASE! I had up-to-date templates and clones on local esx volumes, so I was ready for anything.
The first thing on the ESX host side was to rescan the LUN under configuration > storage adapter > iscsi software adapter. After a few minutes, the iscsi target displayed the new 25 GB size. I went into the storage section and opened Properties for the iscsi volume. I made sure I had the right datastore listed and that the original san volume showed up. (The san volume only shows up for one host at a time, even if both have access. If you don't see your volume, check the other host). I clicked the Add Extent button. In the Extent device window, you should see your target with some free space. When you choose that and click OK, you'll get a warning that any existing data will be wiped out. I guess its referring to what's in the san free space, but again, have backups just in case.
At this point, I tried a couple of esxcfg commands to get the host to recognize the additional disk space, but no dice so I wound up restarting the host. If anyone knows what command would be appropriate here, please post.
I've been happy with my setup in the test environment. Vmotion is smooth. In fact, I have my virtualcenter installed on an XP guest in the shared space and didn't lose my connection to it even when I forced the host it was on to reboot. To top it off, one host has a pentium and the other has a Xeon, so I wasn't sure vmotion would work at all.
I considered this process to be a disk upgrade, but I'll post elsewhere if someone thinks it's more appropriate.