I want to work with low level system programming and virtualization for my research. I tried Ubuntu 10.04 + Xen 4.0.0 but they weren't going quite well right from the installation. One of my friends suggested to take up Gentoo. Any more suggestions?
You're going to find the greatest of success with Debian or Gentoo. Debian, while primarily a binary release, has packages available that turns your system into more of a developer-based system. Gentoo compiles everything by default, so all the developer tools will already be in-place.
If you go with Debian, consider running Sid, their constantly-evolving, "experimental" branch. This will put you right around the same/similar package versions as Gentoo. Otherwise, at least use Squeeze, the next -stable release (a.k.a., Debian 6.0). Lenny's a bit old in the tooth, and uses the older, pre-2.6.30 Xen stuff (~3.2, I believe). Which might be too old for your needs.
In a pinch, you can see if one of the BSDs will work for you as well, like FreeBSD. I doubt its support for virtualization w/ Xen is at the same level as Linux (Xen was basically built around Linux, then ported to other platforms), but it's another option to consider. If you do, like with Debian's Sid, go with FreeBSD's -CURRENT branch for the latest & greatest.
As usual, read the manuals, and look on help sites for tips. For Gentoo, the forums at forums.gentoo.org are an invaluable resource after the manuals. Debian has their mailing list archives and some good documentation as well. Ditto for *BSD. You can also check in on IRC in #gentoo or #debian on FreeNode if you're really in a bind (Debian might be on OFTC, though, I don't remember). Be warned, though, you will be one voice among many in those channels (expect ~600+ users at the same time).