Once upon a time, Xen was the hot virtualization story. The Xen developers had a working solution for Linux - using free software - well ahead of anybody else, and Xen looked like the future of virtualization on Linux. Much venture capital chased after that story, and distributors raced to be the first to offer Xen-based virtualization. But, along the way, Xen seemed to get lost. The XenSource developers often showed little interest in getting their code into the mainline, and attempts by others to get that job done ran into no end of obstacles. So Xen stayed out of the mainline for years; the first public Xen release happened in 2003, but the core Xen code was only merged for 2.6.23 in October, 2007.
A nice article by Jonathan Corbet, which compare Xen and KVM. (worth reading)