There is a number of ways of doing this thing and there is also a big secret about using Xen on Centos 5.1/32/64.
The big secret is:
The text based xenconsole of Centos 5.1 is more than buggy, it does not work at all (at least not when installed using rpm's)
On the other hand RedHat has made a quite good job when they made the intergration of the graphical xenconsole into the Gnome enviroment. So you will just have to install Gnome and it will all work "plug and play" just after a "click". (I used a week on it to realize that it all could could actually all be done in 5 minutes.)
Actually it is difficult like this
http://www.cyberciti.biz/tips/rhel-centos-xen-virtualization-installation-howto.html , while the text based approach will lead you into cicles and circles and to discussion boards with no answers.
There is basically two ways of doing the Virtualization under Xen, "paravitualization" or something like that where the "guest" comunicates more or less direct with the hardware and "full virtualization" where it more works like Vmware.
The Xen host will allways require a customized xen enabled kernel.
The "guest" system will require a customized kernel if you want to do a "paravirtualized" installation (with direct hardware access) but if you do a installation based on "full virtualization" you will only need the standard kernel.
When you are doing these things under Centos51/64/Gnome allmost everything is automated and you will just have to insert the SME 7.3 standard CDROM and it is all more plug and play. (But the plug and play of Vmware is the best one.)