Nadeem,
Although this document is for ESX 3.0.1 and VC 2.0.1, it is still applicable to ESX 3.5. The first link is for a 2 node cluster with each node on different ESX Hosts. Be aware that there are some vMotion restrictions due to the second SCSI controller being in shared mode. Also, FOLLOW THE INSTRUCTIONS, specifically creating your VMDK files. Trust me on this.
http://pubs.vmware.com/vi301/mscs/wwhelp/wwhimpl/js/html/wwhelp.htm

If you want to create the cluster with both nodes on the same host, the instructions are here:
http://pubs.vmware.com/vi301/mscs/wwhelp/wwhimpl/common/html/wwhelp.htm?context=mscs&file=mscs_intro.3.8.html

Again...please be sure to follow the instructions, including the creation of the shared drives, otherwise you won't be able to cluster the VMs together.

Once the cluster is created, SQL install is the same as on a physical cluster.

--Dave