You may run into a problem booting a Xen instance for the first time after creating it. I did on Debian Lenny with Xen 3.2.1.

To fix the problem, DomU (your guest domain) needs the following line added to it's XEN config file (not xend's config file):

# Make TTY login work
extra='xencons=tty1'

Save the file then boot your XEN server again, the console should come up.

This line is basically telling XEN to use tty1 as the console to pipe output. I have no idea what the default is (I am too new to XEN to know). Don't go trying to disable services, etc., the login prompt comes up right after starting crond. The system is booting fine, most likely.