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... ########################################### [100%]
1:kernel-xen ########################################### [100%]
I'm not sure why this is the case and I was so confused that I tried the 686 non-x64 kernel and it did install but of course no modules worked or loaded.
FATAL: Error inserting ppp_mppe (/lib/modules/2.6.18-274.7.1.el5xen/kernel/drivers/net/ppp_mppe.ko): Invalid module format
kernel, xen, _, architecture, solutionpackage, linux, etc, smp, thu, oct, edt, gnu, install, quot, ignorearch, rpm, ivh, preparing, modules, fatal, inserting, ppp_mppe, lib, drivers, ko, invalid, module, format,