A.P. is correct, update manager does not automatically push out anything.
I just upgraded vCenter with Update Manager installed from 5.0 to 5.1. When I did 5.0 update manager no longer works, you have to upgrade it to 5.1 as well.
After doing so all my hosts were still 5.0 I had to create a new upgrade baseline and upload the 5.1 ISO image before I could push out ESXi 5.1 to my hosts.