I have previously posted about the difference between using a chroot and using SE Linux .
Theo de Raadt claims that virtualisation does not provide security benefits  based on the idea that the Xen hypervisor may have security related bugs.
From my understanding of Xen a successful exploit of a Xen system with a Dom0 that is strictly used for running the DomU’s would usually start by gaining local root on one of the DomU instances. From there it is possible to launch an attack on the Xen Dom0. One example of this is the recent Xen exploit (CVE-2007-4993)  where hostile data in a grub.conf in a DomU could be used to execute privileged commands in the Dom0. Another possibility would be to gain root access to a DomU and then exploit a bug in the Xen API to take over the hypervisor (I am not aware of an example of this being implemented). A final possibility is available when using QEMU code to provide virtual hardware where an attacker could exploit QEMU bugs, an example of this is CVE-2007-0998 where a local user in a guest VM could read arbitrary files in the host  – it’s not clear from the advisory what level of access is required to exploit it (DomU-user, DomU-root, or remote VNC access). VNC is different from other virtual hardware in that the sys-admin of the virtual machine (who might be untrusted) needs to access it. Virtual block devices etc are only accessed by the DomU and Xen manages the back-end.
The best reference in regard to these issues seems to be Tavis Ormandy’s paper about hostile virtualised environments . Tavis found some vulnerabilities in the QEMU hardware emulation, and as QEMU code is used for a fully virtualised Xen installation it seems likely that Xen has some vulnerabilities in this regard. I think that it is generally recommended that for best security you don’t run fully virtualised systems.
The remote-console type management tools are another potential avenue of attack for virtualised servers in the case where multiple users run virtual machines on the same host (hardware). I don’t think that this is an inherent weakness of virtualisation systems. When security is most important you have one sys-admin running all virtual machines – which incidentally seems to be the case for most implementations of Xen at the moment (although for management not security reasons). In ISP hosting type environments I doubt that a remote console system based on managing Xen DomU’s is going to be inherently any less secure than a typical remote console system for managing multiple discrete computers or blades.
I have just scanned the Xen hypervisor source, the file include/asm-x86/hypercall.h has 18 entries for AMD64 and 17 for i386 while include/xen/hypercall.h has 18 entries. So it seems that there are 35 or 36 entry points to call the hypervisor, compared to 296 system calls on the i386 version of Linux (which includes the sys_socketcall system call which expands to many system calls). This seems to be one clear indication that the Linux kernel is inherently more complex (and therefore likely to have a higher incidence of security flaws) than the Xen hypervisor.
Theo’s main claim seems to be that Xen is written by people who aren’t OpenBSD developers and who therefore aren’t able to write secure code. While I don’t agree with his strong position I have to note the fact that OpenBSD seems to have a better security history than any other multi-user kernel for which data is available. But consider a system running Xen with Linux in Dom0 and multiple para-virtualised OpenBSD DomU’s. If the Linux Dom0 has OpenSSH as the only service being run then the risk of compromise would be from OpenSSH, IP based bugs in the Linux kernel (either through the IP address used for SSH connections or for routing/bridging to the OpenBSD instances), and from someone who has cracked root on one of the OpenBSD instances and is attacking the hypervisor directly.
Given that OpenSSH comes from the OpenBSD project it seems that the above scenario would only add the additional risk of an IP based Linux kernel attack. While a root compromise of an OpenBSD instance (consider that a typical OpenBSD system will run a lot of software that doesn’t come from the OpenBSD project – much of which won’t have a great security history) would only lose that instance unless the attacker can also exploit the hypervisor (which would be a much more difficult task than merely cracking some random daemon running as root that the sys-admin is forced to install). Is the benefit of having only one instance of OpenBSD cracked due to a bad daemon enough to outweigh the risk of a Linux IP stack?
I’m sure that the OpenBSD people would consider that a better option would be OpenBSD in the Dom0 and in the DomU. In which case the risk of damage from a root compromise due to one badly written daemon that didn’t come from OpenBSD is limited to a single DomU unless the attacker also compromises the hypervisor. When working as a sys-admin I have been forced by management to install some daemons as root which were great risks to the security of the system, if I had the ability to install them in separate DomU’s I would have been able to significantly improve the security of the system.
Another flaw in Theo’s position is that he seems to consider running a virtual machine as the replacement of multiple machines – which would be an obvious decrease in security. However in many cases the situation is that no more or less hardware is purchased, it is just used differently. If instead of a single server running several complex applications you have a Xen server running multiple DomU’s which each have a single application then things become much simpler and more secure. Upgrades can be performed on one DomU at a time which decreases the scope of failure (which often means that you only need one business unit to sign-off on the upgrade) and upgrades can be performed on an LVM snapshot (and rolled back with ease if they don’t succeed). A major problem with computer security is when managers fear problems caused by upgrades and prohibit their staff from applying security fixes. This combined with the fact that on a multiple DomU installation one application can be compromised without immediate loss of the others (which run in different DomU’s and require further effort by the attacker for a Xen compromise) provides a significant security benefit.
It would be nice for security if every application could run on separate hardware, but even with blades this is not economically viable – not even for the biggest companies.
I have converted several installations from a single overloaded and badly managed server to a Xen installation with multiple DomU’s. In all cases the DomU’s were easier to upgrade (and were upgraded more often) and the different applications and users were more isolated.
Finally there is the possibility of using virtualisation to monitor the integrity of the system, Bill Broadley’s presentation from the 2007 IT Security Symposium  provides some interesting ideas about what can be done. It seems that having a single OpenBSD DomU running under a hypervisor (maybe Xen audited by the OpenBSD people) with an OpenBSD Dom0 would offer some significant benefits over a single OpenBSD instance.
-  http://etbe.coker.com.au/2007/08/22/se-linux-vs-chroot/
-  http://kerneltrap.org/OpenBSD/Virtualization_Security
-  http://cve.mitre.org/cgi-bin/cvename.cgi?name=CVE-2007-4993
-  http://cve.mitre.org/cgi-bin/cvename.cgi?name=CVE-2007-0998
-  http://taviso.decsystem.org/virtsec.pdf
-  http://shell.cse.ucdavis.edu/~bill/virt/virt.pdf