I can confirm this problem.
I'm running kernel 2.6.24-19-xen on Ubuntu 8.04, and have got two Intel 82575EB 
nic's, which just don't work.
According to ifconfig, ip link show, brctl show and so on, everything seems to 
be fine. But there is just no traffic going through the interfaces.
With the standard (no-xen) kernel, everything works fine.

I've got four brand new servers, which should become xen hosts, and
can't use them right now. A quick fix would be really, really
appreciated.

-- 
Ubuntu 8.04 Xen 3.2 no network with Intel (igb) nic
https://bugs.launchpad.net/bugs/236268
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