Mammoth VPS uses Xen (running on CentOS hosts) as its virtualization platform.
When we started building our VPS service, our primary concern was performance. After some bad early experiences with virtualization, we knew that the available solutions were not created equally - and as our own first customer, the solution had to be both fast and isolated.
Virtualization platforms always incur some overhead compared to running software on the host computer but a good platform will minimise this as much as possible. The most common problem with virtualized systems is I/O performance - slow hard disk or network speeds.
With Xen, we run our Linux VPS with full paravirtualization and our Windows VPS use the "GPLPV" paravirtualized hard disk and network drivers. With this setup, the hard disk and network drivers "know" they are in a virtualized environment and can communicate directly with the host for optimal speed (instead of relying upon the host providing a virtual implementation of a hard disk and network card) which provides excellent performance.
A good VPS will feel just like a dedicated server - just because one customer decides to start up a resource-intensive application should not cause everyone else problems. Xen has excellent support for VPS isolation - CPU usage can be both weighted and capped, while RAM is dedicated to each VPS.
Our second concern was automation and configurability. As a completely automated service, we needed a platform that could be completely scripted while still exposing all its features. Xen has its roots at the command line and so fit this description admirably.
Our final concern was cost; which was less important than performance and automation, but clearly would have an ongoing impact on the success of the service. By building our own control panel we minimised ongoing costs but there was still the issue of licensing for virtualization. Xen is free software, meaning we have no ongoing software costs, allowing us to keep costs low by pricing them according solely to hardware and operating costs alone.