Of course, the purpose of a server is to run applications—we're not really interested in how many times per second the VM can do absolutely nothing. For testing application performance, we use the applications that we're planning to put on the machine, and then throw load at them.
Since this is necessarily application-specific, we can't give you too many pointers on specifics. There are good test suites available for many popular libraries. For example, we've had customers benchmark their Xen instances with the popular web framework Django.
httperf: A Load Generator for HTTP Servers
Having tested the effectiveness of your domain's network interface, you may want to discover how well the domain performs when serving applications ...