GRUB2 on Debian is configured in /etc/defaults/grub. To get the correct boot parameters for the hypervisor I use the following lines:
#for normal use:
GRUB_CMDLINE_XEN="dom0_mem=256M"
# for rescue mode:
GRUB_CMDLINE_XEN_DEFAULT="dom0_mem=1024M"
To pass options to Xen kernels I use GRUB_CMDLINE_LINUX_XEN_REPLACE="xen-pciback.permissive xen-pciback.passthrough=1 xen-pciback.hide=(00:01.b)(00:02.0)". See Debian bug 617538 and Debian bug 617538 for more info. You will need grub-pc from Debian Wheezy (1.99-14 or up)!