Following your suggestions (except 1)  :-
1. Made direct port Xen 3.4.2 to Ubuntu Jaunty Server & applied ext4 patch for pygrub from Mark Johnson (MRJ)
2. Edited xend-config.sxp
   (xend-http-server yes)
# service xend restart
# ln -s /usr/local/bin/pygrub  /usr/lib/xen-default/bin/pygrub
# apt-get install virt-manager libvirt-bin kvm
# export VIRSH_DEFAULT_CONNECT_URI="xen:///"
# apt-get install virt-viewer
root@ServerJaunty:/usr/lib/xen-default/bin# virsh -version
Connecting to uri: xen:///
0.6.1
Proceed with virt-install :-
 root@ServerJaunty:~# virt-install -n VM12F -r 1024 -p --vnc --noautoconsole \
> -f /dev/sda3
 -l http://192.168.1.41/f12 --debugSun, 03 Jan 2010 15:17:48 DEBUG    Using libvirt URI connect 'xen'
Sun, 03 Jan 2010 15:17:48 DEBUG    Requesting virt method 'xen'
Sun, 03 Jan
 2010 15:17:48 DEBUG    Received virt method 'xen'
Sun, 03 Jan 2010 15:17:48 DEBUG    Hypervisor type is 'xen'
Sun, 03 Jan 2010 15:17:48 DEBUG    Detected storage as type 'block'
Sun, 03 Jan 2010 15:17:48 DEBUG    Could not open "/etc/sysconfig/keyboard" [Errno 2] No such file or directory: '/etc/sysconfig/keyboard'
Sun, 03 Jan 2010 15:17:48 DEBUG    Didn't find keymap in '/etc/X11/xorg.conf'!
Sun, 03 Jan 2010 15:17:48 DEBUG    Didn't find keymap 'None' in keytable!
Sun, 03 Jan 2010 15:17:48 DEBUG    DistroInstaller location is a network source.
Starting install...
Sun, 03 Jan 2010 15:17:48 DEBUG    Attempting to detect distro:
Sun, 03 Jan 2010 15:17:48 DEBUG    Fetching URI http://192.168.1.41/f12/.treeinfoSun, 03
 Jan 2010 15:17:48 DEBUG    Saved file to
 /var/lib/xen/virtinst-.treeinfo.JlLviW
Retrieving file .treeinfo 100% |=========================| 1.2 kB    00:00     
Sun, 03 Jan 2010 15:17:48 DEBUG    Fetching URI http://192.168.1.41/f12/images/pxeboot/vmlinuzSun, 03 Jan 2010 15:17:48 DEBUG    Saved file to /var/lib/xen/virtinst-vmlinuz.jY2aMJ
Retrieving file vmlinuz.. 100% |=========================| 3.3 MB    00:00     
Sun, 03 Jan 2010 15:17:48 DEBUG    Fetching URI http://192.168.1.41/f12/images/pxeboot/initrd.imgSun, 03 Jan 2010 15:17:48 DEBUG    Saved file to /var/lib/xen/virtinst-initrd.img.Tgbr58
Retrieving file initrd.im 100%
 |=========================| 
 22 MB    00:00     
Sun, 03 Jan 2010 15:17:48 DEBUG    Creating guest from:
<domain type='xen'>
 
 <name>VM12F</name>
  <currentMemory>1048576</currentMemory>
  <memory>1048576</memory>
  <uuid>c1066dcc-90f7-b05c-fe51-2277eea88160</uuid>
  <os>
    <type>linux</type>
    <kernel>/var/lib/xen/virtinst-vmlinuz.jY2aMJ</kernel>
    <initrd>/var/lib/xen/virtinst-initrd.img.Tgbr58</initrd>
    method=http://192.168.1.41/f12  </os>
  <on_poweroff>destroy</on_poweroff>
  <on_reboot>destroy</on_reboot>
  <on_crash>destroy</on_crash>
  <vcpu>1</vcpu>
  <devices>
    <disk type='block' device='disk'>
      <source
 dev='/dev/sda3'/>
      <target
 dev='xvda' bus='xen'/>
    </disk>
    <interface type='bridge'>
      <source bridge='eth2'/>
      <mac address='00:16:36:17:d6:ed'/>
    </interface>
    <input type='mouse' bus='xen'/>
    <graphics type='vnc' port='-1' keymap='en-us'/>
  </devices>
</domain>
Creating domain...                                                 0 B 00:00 
Sun, 03 Jan 2010 15:17:49 DEBUG    Created guest, looking to see if it is running
/usr/lib/python2.6/dist-packages/virtinst/Guest.py:1086:
 DeprecationWarning: integer argument expected, got float
  for ignore in range(1, (5 / .25)): # 5 seconds, .25 second sleeps
Sun, 03 Jan 2010 15:17:49 DEBUG    Saving XML boot config:
<domain type='xen'>
  <name>VM12F</name>
  <currentMemory>1048576</currentMemory>
  <memory>1048576</memory>
  <uuid>c1066dcc-90f7-b05c-fe51-2277eea88160</uuid>
  <bootloader>/usr/lib/xen-default/bin/pygrub</bootloader>
  <on_poweroff>destroy</on_poweroff>
  <on_reboot>restart</on_reboot>
  <on_crash>restart</on_crash>
  <vcpu>1</vcpu>
  <devices>
    <disk type='block' device='disk'>
      <source dev='/dev/sda3'/>
      <target dev='xvda'
 bus='xen'/>
    </disk>
    <interface type='bridge'>
      <source bridge='eth2'/>
      <mac address='00:16:36:17:d6:ed'/>
    </interface>
    <input type='mouse' bus='xen'/>
    <graphics type='vnc' port='-1' keymap='en-us'/>
  </devices>
</domain>
Sun, 03 Jan 2010 15:17:49 DEBUG    Removing /var/lib/xen/virtinst-vmlinuz.jY2aMJ
Sun, 03 Jan 2010 15:17:49 DEBUG    Removing /var/lib/xen/virtinst-initrd.img.Tgbr58
Domain installation still in progress. You can reconnect to 
the console to complete the installation process.
# vncviewer localhost:0
brings up VNC console for F12 installation.