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Xen 3.0 Virtualization User Guide
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1.1 Usage Scenarios

Usage scenarios for Xen include:

Server Consolidation.
Move multiple servers onto a single physical host with performance and fault isolation provided at the virtual machine boundaries.
Hardware Independence.
Allow legacy applications and operating systems to exploit new hardware.
Multiple OS configurations.
Run multiple operating systems simultaneously, for development or testing purposes.
Kernel Development.
Test and debug kernel modifications in a sand-boxed virtual machine -- no need for a separate test machine.
Cluster Computing.
Management at VM granularity provides more flexibility than separately managing each physical host, but better control and isolation than single-system image solutions, particularly by using live migration for load balancing.
Hardware support for custom OSes.
Allow development of new OSes while benefiting from the wide-ranging hardware support of existing OSes such as Linux.

Xen 3.0 Virtualization User Guide
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  Published under the terms of the GNU General Public License Design by Interspire