I hope this helps anyone who, like me :o), didn't RTFM when they upgraded to OES11-SP1 and started having NTP sync problems with their virtual OES servers:

After Applying SLES11-SP2 (and OES11-SP1) Virtual servers time began to go out of synchronization.

ndsrepair -T started showing multiple patched servers time being out of sync.
Staff noticing their PC clocks no longer matching the time on the phone system was a give away.

NTP configuration had not been altered but now was failing.
XEN Host servers are organised to collect NTP time from external sources and distribute it between themselves and then the virtual servers at each of our branches use their local XEN host as the NTP time source.
NTP would momentarily come back into sync if I tried to force the issue with the new ntpdate, sntp -P no -r <time source>, but lost it again after a kernel time sync status change reverted the server back to the incorrect time.

The solution was to RTFM, buried deep in the SLES11-SP2 notes was the following :

Release Notes for SUSE Linux Enterprise Server 11 Service Pack 2 Time Synchronization in titlevirtualized Domains with NTP

Paravirtualized (PV) DomUs usually receive the time from the hypervisor.
If you want to run "ntp" in PV DomUs, the DomU must be decoupled from the Dom0's time.

At runtime, this is done with:
echo 1 > /proc/sys/xen/independent_wallclock

To set this at boot time:
1. either append "independent_wallclock=1" to kernel cmd line in DomU's grub configuration file
2. or append "xen.independent_wallclock = 1" to /etc/sysctl.conf in the DomU.

If you encounter time synchronization issues with Paravirtualized Domains, we encourage you to use NTP.

cat /proc/sys/xen/independent_wallclock showed me my servers were set to 0

I used option 2 and added

#To run NTP in PV DomUs, the DomU must be decoupled from the Dom0's time
xen.independent_wallclock = 1

into the end of the /etc/sysctl.conf file the restarted the server and time (touch wood and whistle) has not so far drifted out of sync.

I hope this helps anyone else as slapdash as me :o)