Login to your Xenserver with ssh and create a iso folder
mkdir -p /var/opt/xen/iso_import
Then, create the ISO store like this
xe sr-create name-label=”Local ISO” type=iso device-config:location=/var/opt/xen/iso_import/ device-config:legacy_mode=true content-type=iso
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If You want to install Debian Lenny, as defined VM, maybe is better to use Remote URL:
http://ftp.de.debian.org/debian/