— In this paper, we evaluate the performance of a software IP router forwarding plane inside the Xen virtual machine monitor environment with a view to identifying (some) design issues in Virtual Routers. To this end, we evaluate and compare the forwarding performance of two identical Linux software router configurations, run either above the Xen Hypervisor or within vanilla Linux. Even with minimal sized packets, we show that the Xen Dom0 privileged domain offers near native forwarding performance at the condition that the sollicitation to unpriviledged domains stay minimal, whereas Xen unprivileged domains offer very poor performance in every cases. This shows that an important design principle for virtual router platforms must be to handle all forwarding, for all virtual routers, onto the same forwarding engine, in order to avoid much detrimental per-packet context switching.