The error I get while trying to connect to the local Xen:

Unable to open connection to hypervisor URI 'xen:///':
unable to connect to 'localhost:8000': Connection refused
Traceback (most recent call last):
  File "/usr/share/virt-manager/virtManager/connection.py", line 971, in _try_open
    None], flags)
  File "/usr/lib/python2.6/dist-packages/libvirt.py", line 111, in openAuth
    if ret is None:raise libvirtError('virConnectOpenAuth() failed')
libvirtError: unable to connect to 'localhost:8000': Connection refused

uname -a
Linux danny 2.6.32-5-xen-amd64 #1 SMP Tue Jun 14 12:46:30 UTC 2011 x86_64 GNU/Linux