The rebased virt-manager enabled the URL install option for all HVM guests, however the xen version in RHEL5 cannot install this way (though qemu/kvm can). We need to disable this option if the user is installing HVM on xen.
Fixed in virt-manager-0.6.1-3.el5. Closing as NEXTRELEASE, since this bug has not existed in any released package as it was brought in by the rebase.