Assumption - You are using hardware RAID configured such that your storage is presented as one large disk /dev/sda (e.g. 2TB)
Step 1 - Install a minimal Debian squeeze system with a 4GB ext3 root partition (/dev/sda1) and 1GB swap (/dev/sda2) using the Debian net installer. Leave the rest of the disk unpartitioned.
Step 2 - Install lvm (logical volume manager) to take care of the disks for your virtual machines:
apt-get install lvm2
Step 3 - Use fdisk to create partition /dev/sda3 to fill the remaining space
fdisk /dev/sda
Afterwards run fdisk -l to check your partitions:
root@xen:~# fdisk -l

Disk /dev/sda: 1999.3 GB, 1999307276288 bytes
255 heads, 63 sectors/track, 243068 cylinders
Units = cylinders of 16065 * 512 = 8225280 bytes
Sector size (logical/physical): 512 bytes / 512 bytes
I/O size (minimum/optimal): 512 bytes / 512 bytes
Disk identifier: 0x00031e29

  Device Boot      Start         End      Blocks   Id  System
/dev/sda1   *           1         973     7811072   83  Linux
/dev/sda2             973        1216     1952768   82  Linux swap / Solaris
/dev/sda3            1216      243068  1942678846   83  Linux
Step 4 - Use pvcreate to set up the lvm space
pvcreate /dev/sda3
Step 5 - Use vgcreate to create a volume group on sda3
vgcreate xen-vol /dev/sda3
Afterwards use vgscan to check your volume groups
root@xen:~# vgscan
 Reading all physical volumes.  This may take a while...
 Found volume group "xen-vol" using metadata type lvm2
Step 6 - Install xen hypervisor
apt-get install linux-image-xen-amd64 xen-hypervisor-4.0-amd64 xen-tools
Step 7 - enable network bridging
nano /etc/xen/xend-config.sxp
#add the line
network-script network-bridge
Step 8 - Disable saving of domU's when dom0 shuts down
nano /etc/default/xendomains
Step 9 - Make xen the default grub entry, not Debian
mv /etc/grub.d/10_linux /etc/grub.d/50_linux
Step 10 - Add these lines to /etc/default/grub to disable OS probing (otherwise you may get entries for your VMs !!!
nano  /etc/default/grub
#Disable OS Probing
Step 11 - Update grub and reboot
Step 12 - Customise the standard VM configuration file for your VMs
nano /etc/xen-tools/xen-tools.conf
Step 13 - Now create your squeeze VM using the base configuration with some overrides
xen-create-image --hostname=webserver --size=8Gb --swap=1Gb --ip= --memory=2Gb
Step 14 - Start the VM
xm create /etc/xen/webserver.cfg
Step 15 - Connect to the VM
xm console webserver
To disconnect from a running VM: