From Xen

When we are talking about virtualization, a domain is one of the virtual machines that run on the system. Domain0 is the first domain started by the Xen hypervisor at boot, and will be running a Linux OS. This domain is privileged: it may access the hardware and can run the XenControlTools that manage other domains. These other domains are referred to as DomUs, the U standing for "user". They are unprivileged, and could be running any operating system that has been ported to Xen.