I hope that this revives my old Thread instead of creating a new one. In case it doesn't, the original is here:
http://lists.xen.org/archives/html/xen-users/2013-04/msg00115.htmlAfter googling around some more, it seems that what you do with IOMMU virtualization is just mere passthrough, and not even the Hypervisor can use directly the Hardware that was passed onto a VM. If you pass, say, a Video Card to the VM, the Hypervisor can't use it any longer. This means that if you only have a single Video Card, you potentially will lose video output for anything but that VM. Best setup seems to be an integrated Video Card like the one that most Processors currently got to handle the Hypervisor + other VMs with the standard emulated VGA Drivers plus a discrete Video Card for the gaming VM.
Virtualization is a different beast that must be supported by that Hardware part itself. Currently, nVidia got some Video Cards named GRID that supposedly got some extra Software for the Hypervisor that allows a GPU to be virtualized and shared among many VMs. XenServer currently seems to support this:
http://www.nvidia.com/object/enterprise-virtualization.html#source=prAMD was going to follow suit with their Radeon Sky line.
I don't know if there are Software workarounds to do the same with standard consumer parts. I suppose that is one of the premium features that gets disabled for the Desktop lines.