I have started using Xen and like it so far. There are a few glitches, like Xen will hide memory from the dom0 and not give it back without a reboot, etc. Overall however I would recommend Xen, especially if you want Linux.

For really robust, high-performance stuff I heartily recommend Solaris and Zones. CPU impact is 1%, filesystem performance difference is practically zero. If you use packages from Blastwave you can have almost all of the software you care about installed.