To be able to use it you first need to know which domain id the virtual machine has you want to connect to. You can use a xm list command for this, the example below is the output of one of my test servers;
[root@vms0 ~]# xm list
Name ID Mem VCPUs State Time(s)
34_jlo1 1 1024 1 -b---- 904.3
39_webcenter0 2 2048 2 -b---- 2742.7
Domain-0 0 574 4 r----- 52882.8
if I want to connect to "39_webcenter0" I will have to use ID 2 meaning my command will be "xm console 2". when you enter this command it will possibly looks like nothing is happening. However if you press enter you will get the login prompt of your console.
[root@vms0 ~]# xm console 2
Enterprise Linux Enterprise Linux AS release 4 (October Update 5)
Kernel 2.6.9-126.96.36.199.1.ELxenU on an i686
Now you will be able to login to your system. One tricky part is how to exit the console again. When you are done you type the exit command and you will again come to the login prompt of your virtual machine. So you are still in the console. The way to exit the console (using putty) is Cntrl + ] and you will again be at the commandline of your Oracle VM server.