sometimes ESXi NTP Service is a bit tricky. (Configuration see kb.vmware.com/kb/2012069)
When it do not update the time but all outputs show the correct NTP settings when you type in “watch ntpq” on ESXi console,
you can try to add the NTP Version to the /etc/ntp.conf .
“Server <NTP name or IP>”
“Server <NTP name or IP> version 3”
Specifically with Windows NTP Server you had to add this option to it.
Yes it is written at http://kb.vmware.com/kb/1005092
but It is at the end of the document hidden and in most cases people do the first steps in the document before they read the whole document and waste time. And… I didn´t found this solution at Google.
Update: There is as well a good KB that describe the Windows NTP + VMware ESXi configuration: http://kb.vmware.com/kb/1035833