I have a similar problem with xen-image-2.6.19-4-generic on a Dell
Latitude X300 except I didn't see the VESA VBE memory issue.

Installing  xserver-xorg-video-intel-1.9.94-1ubuntu3 instead of xserver-
xorg-video-i810-1.7.4-0ubuntu1 fixed the problem for me.

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Xorg does not start in dom0 with i810 driver
https://bugs.launchpad.net/bugs/74023
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