1) Select the VM in the Resources pane, right-click, and then click Install XenServer Tools on the shortcut menu. Alternatively, on the VM menu, click Install XenServer Tools.
2) Click Install XenServer Tools on the message dialog to go to the VM's console and begin the installation.
3) If Autoplay is enabled for the VM's CD drive, installation will be started automatically after a few moments. If Autoplay is not enabled, double-click on the CD drive to begin installing XenServer Tools.
4) Follow the on-screen instructions, and reboot the VM when prompted. If you do not have dotNet 3.5 or 4 installed you will be prompted to install it before the Xen Tools installer will run.
You can install dotNet directly from the Xen tools CD by right clicking and choosing Explore.
Once you are in the CD folder double click the file that starts with 'dotNetFx'. This will take a few minutes to complete the install. Once that has completed you can start the Xen Tools install from the within the same directory by double clicking the file named 'install wizard'.
After the installation has completed you will be prompted to reboot to complete the install. The VM may actually reboot a few times but each time it will continue the install from where it left off. One thing to note is that in Windows 2008 the installation of Xen Tools may cause an issue with the public IP assigned to the VM due to Auto-configuration and DHCP.
To correct this you will need to either RDP to the private IP of the VM (if you have one assigned) or use the console. If after the install of Xen Tools completes you find that the public IP no longer responds you will need to open a command prompt on the VM and run the command `ipconfig` If you see that the Public adapter has been assigned a 169.254.x.x IP take note of the Adapter name. In my case it was Local Area Connection #4.
From the command prompt you will then run the following command `netsh interface ipv4 show inter` and find the ID number assigned to the 169.254.x.x IP. In my case the IP number is 16.
You can then remove that routing with this command "netsh interface ipv4 set interface XX dadtransmits=0 store=persistent". You will need to use the ID number instead of XX. Once you get the Ok from the command prompt go to Start >> Run >> services.mmc and disable DHCP. You will then need to reboot the VM and you are ready to go.