I don't know why this hasn't already been posted all over the interwebs, so I thought I'd post it here. It's amazing how some of the simplest answers never seem to make it into prominence in the Google search rankings.
Anyway, after cloning a VM today in Xen, I tried to start the DomU, and got this error:
Error: (12, 'Cannot allocate memory')
I assumed it had something to do with my Dom0 memory cache consuming nearly every last bit of free memory on my system, so I ran this to clear the cache:
echo 3 > /proc/sys/vm/drop_caches
I confirmed that that "free" reported that the cached memory dropped near zero. Great! Except it didn't help. I then ran "xm info" to check the memory usage in Xen
total_memory : 16378
free_memory : 2
Odd. I checked the Dom0 status to see what's up, and sure enough, my memory allocation on Dom0 is way high.
xm list Domain-0
Name ID Mem VCPUs State Time(s)
Domain-0 0 10482 4 r----- 3273110.4
But I still didn't know how to shrink it. I knew it had something to do with memory ballooning. I also knew you could set the memory allocation of a DomU with "xm mem-set", but I didn't know anything about how to do it with the Dom0. A quick IRC message to my Xen guru, Jima, and I get this simple command (obvious really) in response:
xm mem-set Domain-0 512
This balloons the Dom0 host system (as well as any domain, really) memory usage down to 512MB. In my case, my Dom0 claimed to be using about 2 Gig already, so I ballooned down to 4G instead. Not sure if that was just due to some bad math or assumptions on my part, as I never run anything of significance in Dom0. After you run this, you should be able to start your DomU just fine.