I've got both Xen & KVM systems under my care.

It's no longer true that Xen needs to mean managing the kernel outside the VM. PVGRUB can be specified as the 'kernel' to boot, which will chainload a grub which can be managed inside the VM, which lets you run any kernel you wish and manage the boot process as you would on a non-virtualized system.

Amazon uses Xen for their EC2 product, and as I understand they too now set people up with pvgrub.

It's a slightly similar story under KVM in these scenarios. Customer kernels are trickier.

Depending on what kind of level of virtualization they opted for, I've run Windows on Linux under KVM. They are doing the "boot a kernel" mode instead of fully virtufalized hardware mode probably to save on resources.

Just to confirm, we use KVM across our fleet at DO.

DO uses KVM.