OK - I figured it out! In addition to <emulator>/usr/bin/kvm</emulator> change 
needing to be made, the actual root node <domain> was 
<domain type='qemu'>
I changed to
<domain type='kvm'>

and suddenly I could have as much RAM as I wanted, and my VMs started
flying!

Now as to why they defaulted to qemu domains rather than kvm, that's
something I'll have to look into later, but at least I'm up and running!
Hope this helps someone else in the future.

Serge, thanks for all your help.

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https://bugs.launchpad.net/bugs/695825

Title:
  Qemu is running without kvm acceleration in maverick

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