Linux VM unable to resolve DNS from Windows VM running on same XEN host

What:

SUSE Linux Enterprise Server 11 Service Pack 2
Microsoft Windows Small Business Server 2008

Problem:

SLES VM unable to resolve DNS from Windows VM running on same XEN host Virtual Machine
Driver Pack (VMDP) is installed on Windows VM

Solution:

The request is getting lost because of lack of support for UDP Checksum Offloading in the Virtual Machine Driver Pack.  You can workaround the issue by removing or disabling VMDP or by disabling TCP Checksum Offloading on the Windows VM or the SLES VM.

To disable TCP Checksum Offloading in Windows, go to the properties of the LAN driver > Configure > Advanced > Set "TCP Checksum Offload (IPv4)" to disabled.

To disable it in SLES, run "ethtool -K eth0 tx off".  Replace eth0 with the correct device name.

Source: https://www.suse.com/support/kb/doc.php?id=7007604