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If you want to install OVM with the production option then you will basically need three distinct hosts:
a) the database host, where you install SE/EE on (XE is not for production use and not supported for production use!)
b) install OVM Manager on any computer running OEL 5 (or later)
c) install OVM Server on a bare metal host who's hardware is supported
As far as the SE/EE license goes: Oracle always allows anyone to download and install their software to try it out. If you are putting your setup into production, that is not covered and demands an support contract with Oracle. And from using Oracle for many years, there will come the day when you will need it… ;)
So long story short: grab the Oracle SE/EE installation and be familiar with it - Oracle DB that is, otherwise you'll be sitting there pulling your hair out and yell at your computer.
Or, try the not yet released 3.2.x version of OVMM with runs against MySQL - most likely the easy way to go.
What is the reason for not running the OVM on the same machine as the database host?
Yeah - of course you can install OVM Manager and Oracle on the same host, but if you'd need to restart the host for whatever reason, you will first need to startup the Database and have OVMM start later on, since Oracle won't start up automatically, so keeping zhen seperate might be a good thing for starters.
It really depends on how comfortable you are with Oracle, but you surely can do it on the same host.
You can load grid and cluster services will automatically start the database. I have both together on the same host. I use a grid enabled ASM oracle database. They restart in the proper order if you reboot.
Well… I guess most of this audience is neither used to grid or cluster…