I've been down this road a few times -- Ive tested various soltuions Xen/Vmware/KVM/Qemu/VirtualBox/Viz/ -- a few others...
Anyway the solution I found that I liked best was a NetBSD/Xen setup. Dom0 on Netbsd (well supported) and then made all the DomU's -- You might be wondering why I choose NetBSD. Well first, I didnt want to use linux, granted it works well I just perfer BSD style scripts. Also with NetBSD i was able to use PF natively, which is always nice. I was able to keep the features of a slim small footprinted BSD box and use Xen to its fullest potential. Many might argue and perfer a Linux setup - while this is perfectly fine and works well; I believe the way BSDs work is a supireror design.
Also the scalable performance with NetBSD according to benchmarks Ive performed my self, and others Ive seen seems to do a little better then the Linux kernel. Granted this is on the hardware I was using, results may vary.
Just my 2cents
