CentOS virt - Jan 2008 - Network problems with Centos 5 xen kernel

Hi - I have a machine which was originally built with Centos 5.0 
including xen. It has all the current updates and here are some questions:

The current problem is:
1) If I boot the non-xen kernel - it runs fine. If I boot the xen kernel 
- it boots - but has no network connectivity - and I get the following 
errors continuously in the messages log:
Time/date: C5 Kernel: vif0.0: received packet with own address as source 
address.

And another question:
2) The Centos 5.1 release notes say that the 5.1 xen release includes 
dnsmasq, and that this may conflict with dhcpd and named if you are 
running these. I am running both - and i thought dnsmasq was not running 
because it is set to "not start at boot" - but I now notice that it is
"running" even though it is set to "not start on boot". This
is true
whether I boot the xen or non-xen kernel. Is this a problem - and if so 
- how do I stop it from running? How do dnsmasq and dhcpd both function 
without breaking each other?

Now some detailed background:
The machine uses a Realtek 8111B network adaptor - and this has been a 
problem all along. I used to manually reinstall the r1000 driver 
(apparently the correct driver for the adaptor) every time the kernel 
was updated. Tedious - but it worked. My xen kernel worked fine. Some 
months back - a bunch of updates came through corresponding to the 
release of Centos 5.1 - and my normal driver re-install didn't seem to 
get the Xen kernel running. On advice from the Centos forums - I 
installed the dkms-r1000 driver - and eventually got the non-xen kernel 
running fine - but couldn't get the xen kernel running. Every boot - the 
message "starting eth0 - Failed" would come up. I have been using the 
non-xen kernel ever since. My system has both kernel-devel and 
kernel-xen- devel installed.

Just yesterday - I installed the latest Kernels ( kernel 
2.6.18-53.1.6.el5 
<https://192.168.0.201:10000/software/edit_pack.cgi?search=kernel&package=kernel&version=2%2E6%2E18%2D53%2E1%2E6%2Eel5>)
- using gnome software updater which installs both xen and non-xen 
kernels. The non-xen kernel worked fine without any manual driver 
install. Presumably the dkms install worked fine.

When I tried to boot the xen kernel - there were lots of problems - 
partly because I recently got the shcpd going on the server - and it now 
needs static ips. The xen kernel still seemed to be set to dynamic ips - 
but that was easily fixed. Now the message "starting etho - OK" is 
displayed - and nearly everything looks OK in the startup messages - but 
several things are slow to start. Once it boots - there is no network 
connectivity - and the above "vif0.0" errors appear in the messages
log.

Can anyone shed any light on these questions?

Thanks

Richard.