I finally got the chance to set up a Debian Xen server today. After wrestling with Xen on a VMWare virtual machine (I know, I know) I found an older tower with an AMD CPU that happened to have the virtualization CPU capability. After that, I had much better luck.
The VMWare machine actually worked out somewhat well - it did everything, except DomU networking. I tried all options: network-bridge, network-route, and network-nat - all no good - packets were blocked.
With the real machine, it worked like a dream - though we did run into a problem with squeeze as a DomU (I'm running squeeze on Dom0) - when I created images with xen-create-image, the boot process would hang when trying to mount root. Lenny worked without a hitch.
Next up - running an openvz kernel within a domu!
UPDATE: I was able to install an OpenVZ kernel inside of a Xen virtual machine image today! How freaking cool is that?? This is not on the VMWare machine, but a real machine with an AMD CPU that supports virtualization.
The only way I could get this to work was to use the Debian Squeeze distro created with xen-create-image and without the --scsi option. The Debian Xen documentation is a little confusing about this - whether or not to use the "--scsi" option. It works with Ubuntu Maverick and Lenny, but not Squeeze or Wheezy - the boot process hangs when it can't find /dev/sda2.
As a workaround, I left out the "--scsi" flag when using xen-create-image, and then installed grub within the image (which requires a working pygrub on the debian dom0). After that I was able to install the OpenVZ kernel and boot with it. See this page on superuser where I comment about my resolution:
I ended up simply not using the --scsi option for squeeze guests. I was able to make changes to the domu.cfg file, referencing xvd(a|b), and installing grub in the domu as described on the Debian pygrub page. Furthermore, I was able to install openvz in the domu, too!
Anyway, I am really impressed with Squeeze's support for Xen 4.0. I feel like this is going to have a huge impact on how GNU/Linux and virtualization is going to evolve. Sure, KVM is making some impressive progress into the kernel, but I'm just not comfortable with its userland vibe. Not to mention its spawned from Bellard's qemu project - phenomenal!! As a matter of fact, some of QEMU is used for Xen's HVM implementation.
I can't wait to automate the build of this server as well as the build of xen images and openvz containers within them. That will be really awesome. Oh and I also want to see what the xen http server is all about.... so much cool stuff to explore... lol!