This can be fixed with this patch:

diff --git a/scripts/ovirt-config-boot b/scripts/ovirt-config-boot
index ed7ee87..7574247 100755
--- a/scripts/ovirt-config-boot
+++ b/scripts/ovirt-config-boot
 -172,9 +172,9 @@ ovirt_boot_setup() {

     local oldtitle
     if [ "$candidate" = "Root" ]; then
-        oldtitle=$(grep ^title /boot/grub/grub.conf|tail -n1|cut -c7-)
+        oldtitle=$(grep ^title ${grub_dir}/grub.conf|tail -n1|cut -c7-)
     else
-        oldtitle="BACKUP $(grep ^title /boot/grub/grub.conf|head -n1|cut -c7-)"
+        oldtitle="BACKUP $(grep ^title ${grub_dir}/grub.conf|head -n1|cut -c7-)
     fi
     # reorder tty0 to allow both serial and phys console after installation
     if [ "$OVIRT_ISCSI_ENABLED" = "y" ]; then

checked with rhev-hypervisor-6.0-11 and 6.0-12 

steps:
1. install RHEVH 6.0-11 onto virtio image without sharing root 
2. "linux upgrade" to upgrade RHEVH from 6.0-11 to 6.0-12 

Actual result
in grub.conf , there is only 6.0-12 new title , no 6.0-11 
default saved
timeout 5
hiddenmenu
title Red Hat Enterprise Virtualization Hypervisor (6.0-12.el6)
    root (hd0,0)
    kernel /vmlinuz0 ro root=live:LABEL=Root roottypefs=ext4 console=tty0                 rhgb rd_NO_LUKS rd_NO_MD rd_NO_DM rootflags=ro crashkernel=128M
    initrd /initrd0.img

3.reboot from CDROM again to upgrade from 6.0-12 to 6.0-12 
4.check grub again

[root@localhost ~]# cat `find / -name grub.conf`
default saved
timeout 5
hiddenmenu
title Red Hat Enterprise Virtualization Hypervisor (6.0-12.el6)
    root (hd0,1)
    kernel /vmlinuz0 ro root=live:LABEL=Root roottypefs=ext4 console=tty0                  console=ttyS0,115200n8 rhgb rd_NO_LUKS rd_NO_MD rd_NO_DM rootflags=ro crashkernel=128M
    initrd /initrd0.img
title BACKUP Red Hat Enterprise Virtualization Hypervisor (6.0-11.el6)
    root (hd0,1)
    kernel /backup-vmlinuz0 ro root=live:LABEL=Root roottypefs=ext4 console=tty0                  console=ttyS0,115200n8 rhgb rd_NO_LUKS rd_NO_MD rd_NO_DM rootflags=ro crashkernel=128M root=live:LABEL=RootBackup
    initrd /backup-initrd0.img
    savedefault


So there should be some drawback for grub entry creation . Set bug status to ASSIGNED

Issue is that we aren't looking in the right place when creating the BACKUP entry.  We have 2 partitions that we use, one for Root and one for RootBackup.  The current version is installed to Root.  When upgrading, the new version is installed into RootBackup (renamed to RootNew) and on reboot, we rename everything appropriately so that Root --> RootBackup and RootNew --> Root.

On upgrade we should be looking at Root to determine whether we create the Backup entry, but we're looking at RootBackup.  That is why it was only created the second time in vbian's example in Comment 5.

A patch should be coming shortly to fix this.

Created attachment 440669 [details]
Patch

checked with rhev-hypervisor-6.0-13 and rhev-hypervisor-6.0-11

steps:
1. install RHEVH 6.0-11 onto virtio image without sharing root 
2. "linux upgrade" to upgrade RHEVH from 6.0-11 to 6.0-13 

Actual result
in grub.conf 
default saved
timeout 5
hiddenmenu
title Red Hat Enterprise Virtualization Hypervisor (6.0-13.el6)
    root (hd0,1)
    kernel /vmlinuz0 ro root=live:LABEL=Root roottypefs=ext4 rhgb rd_NO_LUKS rd_NO_MD rd_NO_DM rootflags=ro crashkernel=128M
    initrd /initrd0.img
title BACKUP Red Hat Enterprise Virtualization Hypervisor (6.0-11.el6)
    root (hd0,1)
    kernel /backup-vmlinuz0 ro root=live:LABEL=Root roottypefs=ext4
rhgb rd_NO_LUKS rd_NO_MD rd_NO_DM rootflags=ro crashkernel=128M root=live:LABEL=RootBackup
    initrd /backup-initrd0.img
    savedefault

so set bug status to VERIFIED

Red Hat Enterprise Linux 6.0 is now available and should resolve
the problem described in this bug report. This report is therefore being closed
with a resolution of CURRENTRELEASE. You may reopen this bug report if the
solution does not work for you.