I'll try to answer some of your points, based on my experience dealing with XEN and live physical server migration to a virtualized environment.
I assume this software should help migrate your physical server to a virtual machine?
In that case, I have asked this specific question some time ago on serverfault: http://serverfault.com/questions/25862/converting-a-live-server-to-xen-domu
Based on the answers I chose to migrate my system using RSYNC (I couldn't stop the server that's being migrated), here's the specific line I've used:
$ cd /
$ rsync -HavSux --exclude "/proc" --exclude "/boot" --exclude "/sys" --exclude "/mnt" --exclude "/backup" root@SERVER:/ .
--exclude requirements main differ from case to case.
The result was great, the server got everything migrated, users, passwords, service configurations, binaries etc. etc.
Here's the process for migrating a live linux system to a XEN VM I've used:
Install XEN kernel on the physical server - this will be needed to boot the VM under XEN.
Create a virtual machine with same OS version that is on the physical one, allocate same amount of space, match partition list as closely as possible
Mirror everything using RSYNC to the VM, without excluding /boot
Modify VM config file, so that exported block device names match your physical system (i.e not use default /dev/xvdaY, but use /dev/sdaY)
Modify VM config file to use PYGRUB http://wiki.xensource.com/xenwiki/PyGrub to boot kernel from within your VM, the one that you installed in step 1 and mirrored.
Launch VM, repeat RSYNC process excluding /boot as many times as needed.
V2P software in the event you want to revert
Do not know of any software, in my case, I've set up XEN on different hardware, reverting would be as simple as moving IP configuration from VM back to physical server and running RSYNC on physical to sync files off the VM one.
- Best linux virtual environment hardware/software
Any linux distro you're most familiar with will do. I like Debian personally.
LVM is a must for logical volume separation.
Make sure you have lots of memory and a capable CPU, make sure CPU has hardware virtualization support: Intel-VT/AMD-V.