A couple of weeks ago I installed Ubuntu 7.10 (Gutsy) on a decent Intel branded Xeon server, with the purpose of running it as a Xen server. I planned to run 4 or 5 Gutsy domUs on it with Apache, etc for various internal web apps.
After doing the usual aptitude setup business on the host machine, I started provisioning the guest images, etc. During the debootstrap process (read: heavy disk I/O), the host server would kernel panic and fall over. I tested similar operations with the non-Xen kernel and the server was stable. I assumed that there was some disk I/O compatibility issue between the Xen kernel and my Intel SRCU42X Raid card, and abandoned the idea of Gutsy. I used Feisty for the host and guests instead, with no problems.
Then, a few days ago (just to humor myself), I tried again to set up a Gutsy Xen server on a basic desktop machine. Dual core Athlon 64 3800+, nForce 4 chipset, single 80GB SATA drive: Same issue - kernel panics during heavy-ish disk I/O operations.
So for now, there is no way I'm using the Xen kernel in Gutsy. Xen on Feisty seems to be really stable on the 4 or 5 boxes that I have running it. The one problem with this is that debootstrap in Feisty doesn't have the scripts for building a Gutsy guest image, so it's a manual process for running Gutsy guests on a Feisty host.