The exact meaning of "compatible" is probably important here. VMware can read and boot Virtual Server machines (after some conversion), but not vice versa. If you were using both in the same shop, any migration you might do would essentially be in one direction.
Xen isn't the same kind of product as VMware or Virtual Server at all, so it isn't directly compatible with either of those products -- it requires that the guest OS (operating system) be explicitly written to support Xen's variety of virtualization. (Note that with Xen 3.0 and the appearance of Intel and AMD processors that have hardware-based virtualization features, this is changing, so I imagine it will be possible to port VMs (virtual machines) into Xen sooner rather than later.)
This was first published in October 2006