The following config works and creates a good VM in Xen:

# Kernel Setup
kernel = "/boot/vmlinuz-2.6.18.8-xenU"

# Memory
memory = "256"

# Disk
disk = [
"file:/opt/xen/domains/110/sda1.img,sda1,w",
"file:/opt/xen/domains/110/swap.img,sda2,w"
]

# container name
name = "110"
hostname = "boo"

# Networking
vif = ["type=ieomu, bridge=xenbr0"]

# VNC
vnc = 1
#vfb = [ 'type=vnc,vncdisplay=2,vnclisten=0.0.0.0,vncpasswd=110' ]
# Behavior Settings
root = "/dev/sda1"
extra = "fastboot"

But when I uncomment the VFB line, I get the following error after it hangs for at least 30 seconds:

[root@customer 110]# xm create boo.cfg 
Using config file "./boo.cfg".
Error: Device 0 (vkbd) could not be connected. Hotplug scripts not working.

Any ideas?

Part two of this question:

Sometimes it actually works, and a port is opened. When this happens, nmap shows the VNC ports open and I can connect via the VNC client, but it just hangs at "Connection established." and no VNC display shows up. I've tried multiple VNC clients (TightVNC, TightVNC Java Console, RealVNC), but they all fail to connect.

Does VNC through Xen require X to be started in order to function? I was under the impression that it would show the console screen, so I'm confused as to why all these issues are occurring.

Thanks!