In theory, Xen should be faster, especially with a fully para-virtualised setup.
However, Xen is many, *many*, *MANY* times harder to configure than KVM, and many times harder to manage than KVM, and trying to use different OSes (or even different versions of Linux) will drive you to drinking on the job.
Xen is just annoying, and should be avoided. It's going the way of the dodo, anyway, with every major Linux distro abandoning Dom0 support.
KVM on the host is the way to go. Just use a slimmed down Linux with the latest KVM, and install whatever you want into the VMs. Any OS that can be installed onto a P3 system can be installed in a KVM virtual machine.
If you want to use FreeBSD technologies, then setup a separate FreeBSD+ZFS box, exporting ZFS filesystems via NFS, and use root-on-NFS in your VMs (network booting).