Osburn,
This is the steps I am going to be testing and I think might reduce some of yours if you don't need to backup the DB and it doesn't call for a dummy SSO server. I will probably be testing this method in my lab this week. Vmware support has said this should work, but I'll post my results once I can get to it.
Install SSO
Install Inventory service on new server
Uninstall 5.0 Vcenter service on app server which in turn uninstalls inventory service
Install 5.1 vcenter service and point to new inventory server
Install Web client