package kernel-xen-2.6.18-274.7.1.el5.x86_64 is intended for a x86_64 architecture
Linux etc 2.6.18-274.7.1.el5xen #1 SMP Thu Oct 20 17:06:34 EDT 2011 x86_64 x86_64 x86_64 GNU/Linux
As you can see above architecture and kernel is 64-bit but I had to force it to install using "--ignorearch"
Solution
#rpm --ignorearch -ivh kernel-xen-2.6.18-274.7.1.el5.x86_64.rpm
Preparing...&nb........