I thought Xen performance hit was like 1% or so. Unless i misinterpreted what our system admins said (we have it running here for an ISP). As for Parallels.... well, there's the $80 cost as well (and i could have sworn parallel had a bigger performance hit than Xen... trying to look up the article now)
Well the only legal way to run OS X on that machine is directly on the hardware AFAIK so that limits you to Parallels.
The performance hit might be lower in Xen for paravirtualized OSes like Linux because they've been ported to the Xen architecture but for fully virtualized OSes there is more of a performance hit and one report I saw said that Windows sucked under the free Xen product because you only get the optimized NIC and storage drivers with their commercial offerings.
Go with VMWare Fusion for OSX. It allows the use of 2 cpus instead of 1 like Parallels and it is faster than parallels. Plus vmware offers better support for linux than parallels. Also the fact that fusion even though its beta3 right now still performs better than parallels on OS's other than windows xp and its FREE. I used to use parallels but after trying out fusion beta3 I am never going back.
Thanks for the headsup on the VMWare Fusion. I've used VMWare in the past (and still use a Fedora box with VMWare running Vista, XP, W2K, and W98), but this looks great.
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