As promised, here's what I did to get iSCSI root running under XenU under Debian 3.1 (Sarge):
Be running linux 2.6 under XenU.
Build XenU with SCSI disk support (I did them as modules)
Build it according to the instructions there (i found it a bit tricky) and install under your XenU
Built it according to the instructions there (much easier).
Make sure the modules from linux-iscsi and iscsi-init are in /lib/modules/... for XenU.
Copy the attached script 'iscsi-init' to /etc/mkinitrd/scripts in XenU.
mkinitrd as normal.
Add the appropriate bits to your kernel command line for XenU as per the README in iscsi-init.
Reboot and enjoy. Sorry if it's a bit vague, i can fill in any details if anyone is interested.
I'm just now trying to get RAID1 working over iscsi so I get high availability, but mkinitrd starts raid before the iscsi script runs so I need to re-jig it a bit.