DirectPath I/O is available from vSphere 4.0 forward. It uses Intel VT-d and AMD-Vi to allow guests to directly access hardware devices. When using DirectPath a VM can’t use vMotion, snapshots or any feature which leverage them. The directly allocated device isn’t available to other VMs. The only change with vSphere5 is that you can vMotion a VM provided it is in a supported hardware configuration that allows that direct path to the host hardware to persist.
The benefit of DirectPath is very specific. You can offload CPU cycles that the VMM would need to perform to schedule those resources and expose hardware component features that are not yet available through virtualized drivers or that ESXi cannot recognize. There is a performance benefit available in some cases.
The tradeoff is to nearly nullify the benefit of agility inherent in virtualization, effectively tying a guest to a host.
There is a KB describing the configuration process.