What do I need to run a XEN guest machine in fully virtualization mode

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The processor must support Hardware-Assisted Virtual Machine (HVM).

To check if the processor supports HVM use the following command:

For Intel processors:

grep -i vmx /proc/cpuinfo 

For AMD processors:

grep -i svm /proc/cpuinfo 

If nothing returns, then fully virtualization guests will not run.

In the BIOS verify virtualization is enabled:

To check if the BIOS is enabled, issue the following command:

grep -i hvm /sys/hypervisor/properties/capabilities 

If nothing returns; reboot the system and enable the BIOS, look for the setting relating to virtualization, HVM, VT, VMX or SVM.
The BIOS may contains different names for the virtualization setting; check the hardware manual or contact the hardware vendor for more details.

SRC: http://www.redhatmagazine.com/2008/06/09/what-do-i-need-to-run-a-guest-machine-in-fully-virtualization-mode/