Well, Thanks. After two kernel panic and much gnashing of teeth, finally booted from grub. I must admit after working with LILO for even 3 months only, grub looks like a mess to me.
Anyways, found out much work is left, the xen kernel build script is for kernel 2.6.34 only with some OpenSUSE patches or whatnot. Need to work on that now. Any suggestions for our stable 13.37's 2.6.37 kernel?
This thread, however should be marked solved.