terminal mismatch! how retro!

Pygrub will complain and exit if you try to use an unfamiliar terminal type.  The symptoms are that, rather than showing the familiar GRUB-ish menu, Pygrub will exit immediately with errors like these:

Using config file "/etc/xen/test".
Error opening terminal: rxvt-unicode.
No handlers could be found for logger "xend"
Error: Boot loader didn't return any data!
Usage: xm create <ConfigFile> [options] [vars]

And, of course, the domain won't start.

One solution is to symlink rxvt to /usr/share/terminfo/r/rxvt-unicode, thus:

ln -s rxvt /usr/share/terminfo/r/rxvt-unicode

Alternately you could just copy your own rxvt-unicode terminfo file to the remote machine, e. g.:

scp /usr/share/terminfo/r/rxvt-unicode user@remotehost:.terminfo/r/rxvt-unicode