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Done so far: I have setup xen-hypervisor on LinuxMint and successfully passed through my secondary GPU HD6850 to virtual machine running windows 7 Ultimate. The card is successfully recognized from virtual machine and all drivers are setup.
The problem: I don't want to use separate dedicated keyboard,mouse,display to work with the virtual machine. I would prefer to connect to virtual machine via RDP or VNC or any other client but as far as I have tried they do not provide high frame rates so not able to stream HD video which is essential to get work in my case.
Note: The connection is not needed to work over network. The RDP or VNC client would be run from the same physical HOST where xen server and virtual machine (windows 7) are located so there should not by any extra network traffic.
Host (xen-hypervisor-4.1): -cpu: intel i7 3770 @3.4GHz (VT-D enabled) -os: LinuxMint 14 -gpu(for host): HD7970 -gpu(for VM): HD6850
VM: -os: windows 7 Ultimate -gpu: Radeon HD6850 (passthrough card)