Citrix’s move to make their Citrix XenServer free does make sense for the following reasons:

• They will have a hard sale compare to free Microsoft Hyper-V.
• Citrix XenDesktop  and XenApps are Citrix winning products; Citrix clients will benefit from bundles that include the free XenServer.

We have seen clients very interested in XenApp and XenDesktop but are considering using VMware ESX as their hosted platform.  We think more clients will consider Hyper-V for their hosted platform. Since XenServer and XenDesktop work better together more clients will use what comes free in the box rather than complicate the install by using ESX or Hyper-V.
 

We have been working with Xen for years. We became interested in XenServer largely because:

• They provided new releases almost every quarter with more features and enhancements.
• Hypervisor was faster and had support for CPU par-virtualization.
• Cost was less than VMware ESX.
   

But XenServer had some short comings which are still around.  Xen par-virtualization tools (OS drivers which make VM guest perform better) has had bugs since version 3.5.  Even now we have an open case with Citrix which has not been resolved.  
 
Citrix free products which include Xen Motion (a tool used to move virtual guest machines from host to host) are helpful but they are not always fully functional.  Using Xen Motion requires NFS which has a performance issues compared to local storage. To improve NFS performance expensive, specialty products are required.
 
We stopped using VM Motion until business requirements justify investing in a high performance NFS solution.  XenServer host machines have CPU requirements (the same CPU family and speed is required) that must also be met for proper Xen Motion support.
 
Every product has it's short comings, XenServer is no exception.  XenServer is a high performance platform for supporting a wide variety of virtual guest.  It is now FREE!  That is great news.