Without the use of VAAI, cloning or migration of virtual machines by the vSphere VMkernel Data Mover involves software data movement. The Data Mover issues I/O to read and write blocks to and from the source and destination datastores. With VAAI, the Data Mover can use the API primitives to offload operations to the array if possible. For example, if the desired operation were to copy a virtual machine disk (VMDK) file from one datastore to another inside the same array, the array would be directed to make the copy completely inside the array. Whenever a data movement operation is invoked and the corresponding hardware offload operation is enabled, the Data Mover will first attempt to use the hardware offload. If the hardware offload operation fails, the Data Mover reverts to the traditional software method of data movement.
http://www.vmware.com/files/pdf/techpaper/VMware-vSphere-Storage-API-Array-Integration.pdf