That's strange. The "vCenter Server 5 Essentials" key is for the vCenter Server instance (no matter whether this is the appliance or a Windows based installation) and the "vSphere 5 Essentials for 1 processor 6 cpu's" key is the key for the ESXi host(s). Just to confirm, does the error show up when you try to enter these two keys in the Web Client's licensing section, or at the time when you try to assign the license key to the host? Where did you get the "downgrade " warning? Did you already assign the license key to vCenter Server?
André