The condition of VMware tools will not affect the migration to a VDS. The migration feature basically just changes the vNIC's port group assignment. There may be a slight loss of network connectivity when you migrate, possibly as much as one network ping's worth, but this is normal.
It sounds like you may already know this, but once you get your environment set up with VMware tools version 5.1 no more reboots will be required when you upgrade tools.