I assume you'd want to migrate everything as you didn't specify further??
In Server Admin on the older Xserve, select Open Directory and then click the Archive button. From here you can select a location to archive your Open Directory database as a sparseimage which will require a password for encrypting/decrypting (needless to say, you don't want to forget this password). You can save this to an external HD or start the old server in Target disk mode and access it after seting up your new server etc.
When setting up the new server put the basic information in during the Server Setup assistant, but leave out services unconfigured. After it restarts make sure DNS is configured and forward and reverse DNS lookup is working before going further.
When the new Xserve is setup with forward and reverse DNS is working, and Kerberos realm is identical to the old, go back to the Archive screen in Open Directory and locate where the sparseimage file is for restore and it should automatically promote your machine to OD Master and import your users.
If you plan to have all the same services running on the new Xserve you can go to each service in Server Admin and click the settings button. In the lower corner you will see a little box just above the save button. Click and drag this to the desktop and it will save a plist file that you can drop onto the settings window on the new server to automatically reconfigure the service. Do this before making any extensive changes to services in case things don't work after.
If you'll to change the path in WM, all you need to do is move or create the new share point and make it network mountable for home folders, and then copy the existing Home folders into it. The new share point will appear under the 'Home' tab in Workgroup Manager. Select (shift/command) as many users as you want (probably all except your directory admin account), click the new share point under 'Home' and click save. They will get the new path to their new home folders.
How do you plan on using the old Xserve?