CentOS

I wanted to try xen migration, but at the moment I am stuck at this step. Do we need locally attached storage like /dev/sdb for NFS mount, or /dev/sda will suffice? I only have /dev/sda.

You need some form of storage that is accessible from both nodes if you want to do live migration. I have used it with NFS in the past though at the time that was quite slow. I now use DRBD which is like RAID 1 via the network across two separate machines. For testing purposes you can probably use NFS and depending on your needs this might also be good enough for production use. The important part is that the "disk" that the VM sees has to be available on both machines and it has to have identical content on both (including all data that has been written to the "disk" by the running guest).