For the new server I want to use a virtualized setup and would like to split up the server into several independent parts. At least one VM dedicated to mythtv and I stil have to think about the rest. Anyway, I started out using XEN because that was the main approach pushed by SuSE but ran into a lot of problems. In particular, if you run XEN then you have to take special steps to get a graphicall display running and it turns out there are conflicts between the NVIDIA driver and XEN resulting in crashes.
In particular, I tried to upgrade a backup of my server to opensuse 11.3 in a VM and that kept on crashing half way. So, I started looking for alternatives. One of the reasons for usin XEN was that it was going to be part of the kernel, but this is still not the case. It appears however that there is very little chance it will be because it was refused by the kernel developers. Luckily there is an alternative called KVM which is a standard part of the kernel and does not even require a special kernel and boot mechanism.
Trying out KVM was a real pleasant surprise because it just worked. In one evening I got VMs running with NAT and with bridged networking setup without all headaches that XEN has caused me in the past. Of course, this is also due to the good documentation that KVM provides. Over the past weekend I have used KVM intensively to try out the upgrade of my server to a newer version on VMs, and in the end did several upgrades and did not encounter any stability problems. Also it seemed much faster.
Migrating from Xen to KVM is also a breeze since the information you have to specify is the same. Even the tooling is almost the same. Conversely, going back to Xen would also not be that hard if I would want to do that. Main problem that I see now with Xen is that it is an add-on to the kernel and therefore not actively maintained at every kernel release. I would not dare running any server with Xen on it because of the stability problems.