Some time ago, I updated the backup system on a Server running multiple Xen VM instances (DomUs). Before changing the system, each virtual machine ran its own backup scripts to backup data to an external FTP server. Now, VMs are centrally backed up to FTP from the Dom0 using LVM (Logical Volume Manager) snapshots. As a backup solution I chose duplicity and ftplicity in combination with a shellscript to create automated LVM snapshots. Duplicity is a tool to create GPG-encrypted (this way you can store your backups at remote servers without having to worry about who has access to your data) incremental backups to remote servers, ftplicity is a wrapper script for duplicity which allows running duplicity without interaction (e.g. without the need to type any passwords). Ftplicity was originally published by the German computer magazine c’t, but has been undergone further development and is now hosted at SourceForge.
You can find tutorials on ftplicity/duplicity here (Note: they use the original c’t version of ftplicity):
Basically you can use this setup for any kind of LVM snapshot based system, but I’m focusing on backing up Xen VMs here. I assume you got your LVM and Xen system up and running so far. I did this on a Debian Lenny system, but it should be similar on other distros. I did all steps as root.