Initially when I tried to install SLES10 and OES2, I selected the XEN server components as well with the idea being that I would be able to run a virtual machine if I chose later, without actually having the main server system and NSS volumes inside a virtual machine. However, this caused conflicts between NSS and XEN so I did not install XEN.

The recommended installation of XEN is as a very basic SLES10 install with the Server (SLES10 + OES2) installed inside a virtual machine.

I have one major issue with this though. The installation of SLES10 with XEN is installed with an unsecure filesystem ie. Ext3 or ReiserFS. So the virtual machine file containing the NSS (secure file system) is stored on an unsecure file system.
By unsecure I don't mean permissions etc, I am referring to possible cache write errors / corruption etc that can occur in an incomplete journaling file system.

Therefore, what would be ideal would be to run the system in a virtual machine, with access to the real physical hard drive to hold the NSS volumes.
Is this possible?
From what I could read on installation, NSS was only installed inside the virtual machine.