Please try the instructions at:
 * 
https://help.ubuntu.com/community/KVM/FAQ#How%20to%20boot%20Dapper,%20Edgy,%20Feisty%20or%20Gutsy%20ISO?

You should be able to solve your issue using that sed command on the CD.

:-Dustin

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kvm cannot install Ubuntu 7.10 guest on Ubuntu 8.10 server
https://bugs.launchpad.net/bugs/334392
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