I had an extreme amount of trouble installing CentOS 5 on a Debian Lenny Host system with Xen.  I found this website, which gave me the tools needed to create a working installation.  If you are getting errors about "libnss3.so" at startup, this may work.

First, edit /etc/xen-tools/xen-tools.conf and put in the common settings you would do for other domUs.  Set passwd = 1 in the file, so that you will be prompted to set a password for the new system.  Then, edit /etc/rinse/centos5-packages and add:

nss
nspr
python-iniparse

This will give you the extra packages needed to create a working system.

To create the image, use this command:

xen-create-image --install-method=rinse --dist=centos-5 --hostname blahblah --ip xxx.xxx.xxx.xxx

You should be able to boot the image after xen-create-image is finished running.