XenServer Administration Handbook

Chapter 6. Understanding Guest VM Types

While XenServer supports many different operating systems, there are two types of Guest VM virtualization modes: hardware virtual machine (HVM) and para-virtualized (PV).  While a third, PVHVM, will be briefly discussed, the primary distinction between these is related to the Guest VM’s operating system.

HVM Guests

HVM requires specialized extensions present in modern Intel and AMD processors.  These extensions are known as Intel VT-x or AMD-V and allow the physical CPU to trap certain CPU instruction sets that operating systems normally use to interact with a bare metal server.  Were an operating system to execute those instructions when virtualized, other VMs might be impacted.  

HVM is commonly used when virtualizing an operating system such as Microsoft Windows where it isn’t possible to modify the operating system in order to make it virtualization aware.  Because HVM guests have no awareness of their virtualization, they typically use emulated device drivers.  In order to improve the performance of hardware-sensitive operations like disk or network access, HVM guests are usually installed with the XenServer tools.  These tools provide operating system-specific drivers that are optimized for use in a XenServer environment and provide significant performance increase over an emulated driver.

PV Guests

Unlike HVM guests, para-virtualized guest VMs are aware they are virtualized and load an optimized kernel for the target hypervisor. ...