Description of problem: To use the new virtio capabilites available in kvm 60, special command line paramaters need to be passed to kvm. There should be a way to specify that a device should use virtio in the libvirt xml. I propose adding a "model" attribute to the interface element in the XML to be able to specify the type of NIC to emulate, e.g. 'virtio'. For the disk virtio I propose adding an 'interface' attribute to target element (inside the disk element). This interface could then be set to 'virtio', 'ide', 'scsi', etc..
I have a patch against 0.4.0 that does this for block devices (rjones has done the network bit). Give me a few days to rework it against 0.4.1.
Changing version to '9' as part of upcoming Fedora 9 GA. More information and reason for this action is here: http://fedoraproject.org/wiki/BugZappers/HouseKeeping
Also in 0.4.3 AFAIK
Yes, this is most definitely fixed upstream, so closing this bug.