Fedora 7 includes support for both the KVM and the Xen virtualization platforms. For more information on different virtualization platforms, see http://virt.kernelnewbies.org/TechComparison.
More information on Xen itself can be found at http://wiki.xensource.com/xenwiki/ and the Fedora Xen page. More information on KVM can be found at http://kvm.qumranet.com/kvmwiki.
Fedora is following the 3.0.x Xen line. Xen 3.0.0 was released in December of 2005 and is incompatible with guests using the previous Xen 2.0.x releases.