Select the option "Create a new virtual machine":
Note: you can click to enlarge the images.
I will select ESX1 for the host (or the "compute resource"):
I will use my ESX1-Datastore to house the new virtual machine:
Our choices are summarized on the last page:
There is one setting that we must change if we intend to install the OS with a .iso file. We right-click on the virtual machine and select "Edit Settings":
For the CD/DVD drive, we select "Datastore ISO file" instead of the default "Client Device":
We then browse to the location of the .iso file in the Datastore:
To power on the guest, we highlight it and then click on the green arrow as shown below:
In this case, clicking on the green arrow would start the installation process.