To start a VM in recovery mode, highlight the VM and you’ll find “Start in Recovery Mode” in the VM menu up top.

I’m very new to XenServer so still learning but from what I gather, “Start in Recovery Mode” is independent of the VM OS.  Its main function seems to be to change the boot options from hard disk to CD and/or PXE boot.  I may be wrong about that though.

 

relating to HVM mode, this section is taken from Chapter 3 of XenServer 5.5 User Security (http://kb.citrite.net/article/ctx121748):
Hardware assisted mode (or HVM) uses the Intel VT or AMD-V hardware extensions to offload the effort of virtualization onto the hardware. Guests in HVM mode see a complete physical machine, and the hypervisor is not actually present within the virtual memory area. Instructions which normally require privileged-level access are virtualized by the hardware, and the hypervisor uses new instructions (e.g. VMENTER) to switch in and out of the VM.