First read http://wiki.debian.org/Xen#Upgrading.2BAC8-transition
If you don't understand it means that a lenny Dom0 CANNOT boot a squeeze instance because lenny Xen packages do not support the new Grub2.
Be very careful if you decide to do a simple upgrade on all lenny instances to squeeze. If you aren't you might not be able to start any instances.
Be sure to read that whole section on upgrading.
The best solution is to make sure that each server owner has done a VM backup of all there sites then delete all instances and upgrade the Dom0 to squeeze and re-install NEW sqeeze instances.
Be sure that you have manually upgraded the XEN packages !!!
The Xen packages will not upgrade themselves. They must be manually removed and the latest Xen packages must be installed from the Debian Squeeze repository through apt.
Updates !!
If you are getting the error WARNING! Can't find hypervisor information in sysfs!
you need to read the link http://xen-orchestra.com/2010/08/xen-4-on-squeeze-how-to/ - you will see this either in the booting screen or syslog. Run "xm dmesg" in console to make sure then follow the steps to edit Grub2 booting menu.
This is why I only use CentOS / Scientic Linux :)