This figure compares the Cumulative Distribution Functions (CDFs) of the latencies measured in a Xen VM with unpatched guest kernel and with a modified guest kernel having TIMER_SLOP set to 1000:
(image in pdf format).
The measurements can be reproduced by using these scripts: just enter the VMTest directory and type "make cdf-xen-0.txt". To get low latencies, you will need to patch the guest kernel modifying the TIMER_SLOP value.