For this discussion, I will be using the following diagram, representing the basic idea of a virtual network connected to a physical network. I am mostly going to focus on standard switches and standard VLANS, I won't cover the Nexus 1000v, vCNI, VXLAN, or any advanced features, although the basic ideas won't change much. Click on any of the images below for a larger version.
The diagram has two ESXi hosts, each with two VMs. All the VMs are connected to the same portgroup. Each host is connected to two switches for redundancy. The two physical switches are then connected to a root switch, which is connected to a router (or may in fact be a router)