Xen scales rather well - Amazon EC-2 cloud for example..
The issue with Xen is that for the longest time it had zero practical support for non-*nix guests. That limitation is long gone.
KVM is getting more linux happy press, but has a long way to go. For now Xen (Not to be confused with Citrix's XenServer) is a great choice even though the hardcore want KVM (despite its relaitve immaturity)
Convirture do a nice pretty front end to KVM/Xen that suits the CLIphobic, but if you're going to build large scale then it's pretty much irrelevant.
