I'm not saying this is your problem, but your "CD image" parameter seems incorrect base on the wiki (http://fedoraproject.org/wiki/FedoraXenQuickstartFC6)

 

Look at number 6 under "Building a Fedora Guest System using 'xenguest-install'"

 

 

   6.  What is the install location? This is the path to a Fedora Core 6 installation tree in the format used by anaconda. NFS, FTP, and HTTP locations are all supported. Examples include:

          * nfs:my.nfs.server.com:/path/to/test2/tree/

          * http://my.http.server.com/path/to/tree/

          * ftp://my.ftp.server.com/path/to/tree

 

      {i} Installation must be a network type. It is not possible to install from a local disk or CDROM. It is possible, however, to set up an installation tree on the host OS and then export it as an NFS share.

 

 

Is there something I'm missing with VNCserver/viewer?

# xenguest-install
Would you like a fully virtualized guest (yes or no)?  This will allow you to run unmodified operating systems. yes
 What is the name of your virtual machine? fc6-httpd01
 How much RAM should be allocated (in megabytes)? 512
 What would you like to use as the disk (path)? /home/xen/fc6-httpd01
 How large would you like the disk to be (in gigabytes)? 6
 Would you like to enable graphics support? (yes or no) yes
 What would you like to use for the virtual CD image? /home/xen/FC-6-x86_64-DVD.iso
 

Starting install...
libvir: Xen Daemon error : GET operation failed: No such domain fc6-httpd01

VNC Viewer Free Edition 4.1.2 for X - built Oct 25 2006 09:08:37
Copyright (C) 2002-2005 RealVNC Ltd.
See http://www.realvnc.com for information on VNC.

Thu Oct 26 20:21:19 2006
 main:        unable to connect to host: Connection refused (111)
Domain installation still in progress.  You can reconnect
to the console to complete the installation process.
[root@kainos xen]# xm list
Name                                      ID Mem(MiB) VCPUs State   Time(s)
Domain-0                                   0     1477     2 r-----   1003.2
fc6-httpd01                               12      512     1 r-----     34.2
[root@kainos xen]# xm console fc6-httpd01
xenconsole: Could not read tty from store: No such file or directory

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Checked by AVG Free Edition.
Version: 7.1.408 / Virus Database: 268.13.11/497 - Release Date: 10/25/2006