I am a consumer of Xen. One of the web hosting companies that I use uses it. Due to terms of service and such, I haven't poked at it much, but it seems to be working well. I can't say more than that about it.
As for the VMWare recommendation, not sure if you need to have VMWare Server. Workstation does pretty well and has some useful features that VMWare Server doesn't, like snapshots and cloning if memory serves.
If you're deploying virtualization in a production environment, remember that virtual machines are not firewalls. The recommended practice is to use the "separation of concerns" with virtual machines, that is don't put confidential information in a vm on a system where there is also a publicly accessible web site and so on.