I´ve now done the setup and it works correctly...
LVM for /boot is not possible as GRUB has a problem with it. LVM for / is not possible as Xen won´t load the right modules and it does not do the vgchange -a y vgscan thingies... I think it can be done by building a ramdisk (a next project
LVM for other filesystems is possible: I now have it running with only my /var and a data volume /local in LVM. This will make snapshot backups, extending filesystems en moving to new hardware easy...
SMP with Xen is kinda strange. You really get the feelling you are building a single cpu kernel as the XEN config will not show the SMP options in de CPU section. After booting from the succesfull kernel build you will not see additional CPU´s in the top program.
However XEN will use ALL the processors availible
for loading the virtual machines, you can even assign a CPU in the config file by setting cpu=0 or cpu=1 or cpu=#.
A SMP virtual machine is not possible in XEN 2.0. A virtual machine can only use 1 cpu. All that goodness is saved for XEN 3.0 where that is possible... However, Falko seems to have found a bug in networking with Xen 3, and i guess solving it will take it´s time.