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With the Xen hypervisor, every virtual server has it's own kernel, reserved RAM and minimum CPU. Like the FreeBSD jails, each virtual server can burst to use more CPU; but unlike the FreeBSD Jails, a Xen server can not 'burst' to use more RAM. This is because if another user needs the CPU, it can quickly give the other user the minimum cycles. It can not instantly take RAM away from another server, as flushing RAM to backing store (disk) is expensive and not-instant.
You also get your own kernel. You can load whatever loadable modules you want and you can even boot your image off of a custom kernel using pyGrub. Just leave your kernel on the /boot partition (sda or LABEL=PRGMRBOOT in our standard config) and then add your new kernel to /boot/grub/menu.lst, just like a real linux box. Of course, it does need to be a paravirtualized Xen kernel, and it does need to be i386/PAE.
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recommendations to new customers. 