If you create a sparse image file and try to run the new domain for installing
into this image. The domain fails to run, it hangs after a while:

Xen virtual console successfully installed as tty1
Event-channel device installed.
Neither TPM-BE Domain nor INIT domain!
xen_blk: Initialising virtual block device driver
Registering block device major 3
 hda:

The reason for this is a wrong driver in the line:

disk = [ 'file:/var/lib/xen/images/dom2/hda,hda,w' ]

To get this work a block device emulation must be activated. Every time you use
images as filesystems, you must inlcude an "ioemu" into this line. It should
look like this:

disk = [ 'file:/var/lib/xen/images/dom2/hda,ioemu:hda,w' ]