Server :: Limit On The Number Of Virtual Machines Running On RHES / CentOS XEN?

We've been experiencing sudden host server crashes minutes after starting a fourth virtual machine. Our setup looks like:

Dell Poweredge T300
1 x Intel Xeon X3323 Quad Core 2.5 ghz
16 GB Ram
CentOS 5.3 (64 bit)

Server is running a stripped down version of CentOS 5.3 (64-bit), running only the built-in Xen Virtualization Environment. There is no other services running on the server (not samba, httpd, sendmail, cups... nothing except Xen) We've created several virtual machines, and as long as we don't start a fourth virtual machine everything runs smoothly (impresive hardware).

Each virtual server is configured as:

PARAVIRTUALIZED
1 Virtual CPU
1 GB RAM

However, 5 minutes or so after starting a fourth virtual machine, the entire host server crashes and restarts itself. Are we limited by the number of cores on the host machine CPU (4 cores)? 1 for the host and 3 for virtual machines? We've read in forums about other Xen setups running up to 11 virtual machines on less powerful hardware? (a dual core server). Should we be using FULLY VIRTUALIZED virtual machines instead? Is the number of XEN virtual machines in fact limited by the number of cores? If so, how can someone run several virtual machines on a single core host?

By the way, we were replacing a previous Dell Server (Poweredge 2600 with 512 MB Ram and a single Xeon single core processor running Open Virtuozzo). We were able to run up to 16 virtual machines at the same time. Of course none of the machines endured hard work (testing environments, etc). But hey, my point is that we expected to get a much higher number of virtual machines on this new hardware.