Is all this work being done over SSH? Do you have a pf firewall? Have you 
disabled TSO?

ifconfig xn0 -tso


sysctl net.inet.tcp.tso=0

My suspicion is that the slowness of the shell over the network is making the 
machine seem slower than it should be. There are terrible network issues with 
pf and tso on a XenServer environment. I'm not otherwise aware of severe I/O 
issues on XenServer. I have a fairly large cluster running almost all FreeBSD 
guests without any sort of issues related to I/O.
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