> Can anyone please explain to me how exactly the IO is handled if i have
> only Domain 0?
Domain 0 runs the device drivers, which are permitted to write/read the 
devices in your system directly. All Xen really does is take the real 
physical interrupts and issue corresponding virtual interrupts to dom0 (which 
are then handled as usual).
Xen also handles various PCI functions but they shouldn't really matter once 
the system is up and running.
HTH,
Mark
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