according to: 
http://www.howtoforge.com/ubuntu-7.10-server-install-xen-from-ubuntu-repositories-p2
The --ide option is required for the xen-create-image in order for it to 
boot... Can somebody test/confirm that?

I will follow through with the howtoforge suggestions as soon as I get a
chance. Thanks for pointing those out. Usually they figure out the
little issues and then post step by step instructions that work.

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xen guest hangs after mounting filesystem
https://bugs.launchpad.net/bugs/144631
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