Vps host prefer using Xen because of the following good things :-
1. XEN performs extremely well with microbenchmarks giving upto 90% of the performance of native, which is excellent.
2. XEN has excellent management tools -xm.
3. XEN user and developer community is very active with almost 150 mails a day.
4. Has a bigger corporate presence.
Whereas Kvm is not very stable yet , runs with QEMU , Performance is not very good and Came late into the scene.

At this stage of development XEN would be still safer for daily use.

By inertia. We are using KVM

bull...it
All our customer use KVM based virtual machines without any problems.

Yes, Xen is more widely used simply because of its slightly better performance, advanced stage of development, and support by third parties.