Agreed,
I have the the same problem after upgrading from Lenny to Squeeze and
the only option for me is tu use routing networking for xen.
Among this there are another bug in /etc/xen/scripts/vif-common.sh which
trigger a kernel error regarding routing for which exist a patch at
http://xenbits.xensource.com/xen-unstable.hg?rev/b0fe8260cefa
This is very annoying because debian multimedia doesn't offer support
for Lenny anymore and therefore I have to upgrade to Squeeze but Squeeze
is still full of bugs, from my point of view.
Thank You