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.
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.