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Paravirtualization is very lightweight in comparison to the nearest competitor VMware ESX server, so its performance can be very good. In addition, it imposes its changes in a very few aspects of the kernel and allows many other aspects to continue working unmodified. In particular, it uses the native device drivers of its "host" OS (operating system), thereby offering more flexibility in terms of hardware support.
The most obvious drawback is that it requires a specialized kernel for guest OSes, if run on a non-virtualization-capable hardware platform. Getting that specialized kernel set up and configured properly can be a challenge, particularly for non-expert sysadmins.
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