EDIT: Theatre mode doesn't work - a few screen flashes, increased cpu and memory usage before it gets killed. I won't diagnose much further than that because a lack of theatre mode isn't a deal breaker as it's not my media pc.
Theater View runs on OpenGL, it really doesn't work all too well in VirtualBox, which emulates some level of OpenGL, so it not working in Xen is no surprise to me.
I hear there is some work going on for Xen to get virtualized OpenGL/3D support, but that probably needs careful setup and quite new components of everything.
On that note, Video playback is likely not going to be that happy either. Its a bit simpler in nature so its certainly possible it will work, but for something like video playback to be really reliable, it should sit right on the hardware, and not with a VM layer in between.