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From the vserver FAQ:

NTP is used to keep the kernel clock synchronized to GMT/UTC. This is a system level function and should be done in the host server.

However, ntp is also a network daemon and could benefit from being jailed. "system level function" is quite a meaningless term in light of capabilities and vserver - which part of the system does it need? OK, it can have just that.

xntpd has some really brain-dead hard-coded assumptions (above and beyond those in glibc) that is always the local host. Fortunately, on many systems is not used by any vservers or programs running in the system context, so it can make sense to let it be used by the vserver that serves NTP.

You will need to:

This configuration has been seen to work before, however it seems that not all xntpd's like to run in this setup. The one in Debian woody seems to be OK.

The ntpd from woody is ok, too and works out of the box inside a vserver for me (2.6.9-vs-1.9.3). Other ntpds are crashing instantly with SIGSEGV :(

Even no need for but I didn't found a possibility to use ntpq, so its hard to track down errors.