I did some testing on this. I built a vCenter 5 test VM and a 1.3a N1KV VSM.
When I tried to connect to vCenter from the VSM I received this error
"n1kv-dvs(config-svs-conn)# connect
ERROR: [VMware vCenter Server 5.0.0 build-455964] Incompatible VMwarevCenter Server version. Need apiVersion 4+."
So it looks like for anyone with a 1.3 VSM that wants to upgrade to vCenter 5 should upgrade their VEMs to 1.4a and then their VSM to 1.4a first.