Currently there is a serious problem with Xen. Fedora Core 5 with kernel 2.6.18-1.2200.fc5xen and Debian/unstable with kernel 2.6.18-1-xen-686 will not recognise both PC serial ports, and it appears that the one port that is recognised is only usable for a console not for a modem.
The PC serial port is a fairly significant piece of hardware that is used for many things. The total lack of support for it in Xen builds is a significant impediment to Xen use. I believe that one of the potential benefits of Xen is to have applications that are exposed to attack run in a domU so that if a compromise is suspected then the memory can be dumped. Implementing this requires running Xen almost everywhere, which will not be possible if essential hardware is not supported.
I have also discovered a couple of other bugs in Xen in FC5 which I am in the process of verifying and reporting. One is that on a P3 system the plain-text console displays as black on black and the other is that Xorg on a PentiumD system will go into an infinite loop when OpenOffice is started.