It looks like this is fixed in >= 0.6.1-4 upsteam:

https://bugzilla.redhat.com/show_bug.cgi?id=487013

Any chance of an updated version (debian testing/unstable is at 0.6.3-4)
in karmic?

** Bug watch added: Red Hat Bugzilla #487013
   https://bugzilla.redhat.com/show_bug.cgi?id=487013

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libvirtd becomes unresponsive on setvcpus
https://bugs.launchpad.net/bugs/379415
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