Yes, I just finished installing it in a Xen DomU. I have Xen running with Ubuntu 8.04 LTS in the Dom0. I simply created a new DomU with using Debian Lenny (--dist=lenny parameter). Then followed the Perfect Server with ISPConfig 3 tutorial that is on this site.
Now, I will use vmware Because with xen I need a hvm cpu, because I also got a windows running on that
ISPconfig runs fine on all commonly used virtualisation solutions like xen, vmware, openvz / virtuozzo, virtualbox and kvm.