If you happen to have a xenconsoled process that looks like its eating memory, in fact the memory use of xenconsoled is increasing slowly in time. It turns out to be not so much a xenconsoled problem, but more a problem on a guest complaining it can't write to it's disk since it's SR is 100% full due to a stale snapshot which was overlooked.
The problem is that I'm not using VNC to connect to the console's started by xcp-xapi. But those where spitting out megabytes of warnings when trying to write to a full filesystem. Nothing picked this up from the console, so the console buffer of xenconsoled just kept filling up. I had to use screen (been a while) to clear it up fast , so I didn't end up having to download up to 300MB+ through the console. I flushed it to /dev/null this time.
It's ok to kill xenconsoled while running xen. Just restart it manually.
You need to restart it by hand as it's startup is embedded in the xend init script. You can't restart the other services in that script with running VM's.
So remember, keep an eye on that daemon.