Work around :
sudo apt-get install libc6=2.6.1-1ubuntu9
... then... 
sudo apt-get install ubuntu-xen-server
works.

Just an FYI for those who've the same problem and want a quick way to
move forward while this bug is still open.

-- 
Unable to install package  ubuntu-xen-desktop (depends on  libc6-xen) on Ubuntu 
Studio 7.10
https://bugs.launchpad.net/bugs/161783
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