There are several problems that happen after upgrading a F17 desktop VM to F18 using yum, they may or may not be related: 1. httpd cannot be started, but there is no message logged in /var/log/httpd/error_log. 2. Logging out from the desktop will not bring back the login screen. It looks like gdm failed to start. 3. If you restart the VM it will get stuck at boot time, it will show the messages about starting the services, but it won't bring up the desktop login screen. SELinux is in permissive mode. dmesg shows many lines like this: [34015.998096] systemd-journald[305]: Failed to parse log priority line.
The first thing to check here is the initramfs. Make sure to regenerate it using F18's dracut.
Please retry with a more recent F18 version. If the problems persist, please file individual reports about the issues you encounter. I will close this one for now.