For shared hosting, virtualization is not required, you can use directly a dedicated server.
Anyway, KVM will in most of case be a better solution than XEN or OpenVZ.
OpenVZ = Container = bad isolation
XEN = Heavy and more used for Windows VM than for Linux
OpenVZ - overselling of resources can be done but only for the users who use Linux OS.
XEN - For XEN virtualization technology you can oversell for both OS users that is Linux as well as windows.
My personal suggestion would be, go with XEN which as many additional resources to resell and get optimal profits.
There are certain providers who are using VPS for providing shared hosting. This is mainly done to reduce license costs. Most of the software license costs are high for dedicated servers.
If you compare Xen and Openvz for shared hosting, selection depends on what you focus on shared service. If you focus of performance and stability, I would suggest you to choose xen which will restrict resource abuse and you will get best performance with Xen. You won't be able to oversell your resource and that is main drawback of Xen which is the reason why performance is high with this technology.
If you plan to provide a cheap hosting service, its better to use openvz technology and you can oversell the resources. Business hosting providers won't choose openvz for shared hosting as it may effect their reputation.