Instructions to build a router VM like this

1) Get a debian image
2) Put senxtore-read and xenstore-write in there.
  2a) Fidget with debian packages to get the proper stuff in there
  2b.1) apt-get install gcc libc6-dev make (keep track of installed dependencies for 2b.5)
  2b.2) copy svnrepo/code/trunk/vm_xenstore into the image
  2b.3) cd vm_xenstore/tools/xenstore
  2b.4) make install
  2b.5) apt-get remove gcc libc6-dev make (and dependencies)
  2b.6) clean up files (like vm_xenstore)
3) Overwrite 
  3a) /etc/network/interfaces
  3b) /etc/rc.local
  3c) /etc/inittab
  3d) /root/router-setup.sh 
with the files in the scripts/ subdirectory here
4) apt-get install iproute iptables dnsmasq
5) apt-get remove ssh openssh-server cron
6) Remove all services from /etc/rc2.d/that are not strictly necessary. 
  6a) e.g, keep only:  S15dnsmasq  S20makedev  S99rc.local  S99rmnologin  S99stop-bootlogd
7) Fix /root/router-setup.sh internal vars to point to the appropriate xenstore-{read,write} binaries
8) Set up a non-trivial password
9) Poweroff the VM
10) Run ./dump-modules.sh. Takes two args, path to the VM image, and path to standard xen dom0 kernel build directory
11) The VM must be booted with the same standard xen kernel as dom0

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Contents of this directory

necessary_modules: the kernel modules loaded at runtime by the script
dump-modules.sh: a script to be run after you rebuild the dom0 kernel.
It puts the freshly built modules needed by the router VM in its filesystem
sync-scripts.sh: puts the scripts in scripts/ into the bzipped image
old: the previous image (doesn't work with a COW disk!!)
kickoff-test.sh: a script that simplifies testing of the router VM
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The password of the router VM is routerbio