The first time virt-manager is run after a fresh install, it produces an error message about needing more packages to run KVM guests and asks if I want to install them. When I say yes, it brings up a list of dependent packages including libvirt-*-xen and libvirt-*-uml which I *don't* want. crobinso explains that it's trying to install the packages qemu-system-x86 and "libvirt". In the past, the "libvirt" package was really the bulk of libvirt functionality, and didn't attempt to pull in hypervisor dependencies, but with the new package structure of libvirt, that package is really around only for backwards compatibility, and will haul in packages like libvirt-daemon-driver-xen, xen-libs, and xen-licenses as dependencies (which most people don't want). There are actually new subpackages of libvirt that will do exactly what virt-manager is looking for: libvirt-daemon-kvm - for those who want to run kvm domains; it brings in all other libvirt packages necessary for kvm domains, as well as the package "qemu-kvm" libvirt-daemon-qemu - for those who want to run emulated qemu domains. It brings in other required libvirt packages, and also the package "qemu" Beyond this, although I didn't capture the informational dialog, and can't get it to reappear (even when I remove/reinstall virt-manager) it was really unclear on what packages it wanted to install - it just said "KVM" in all caps, rather than explicitly stating "the 'qemu-kvm' package".
I've seen this too - it might be related to the bug I just filed bug 876785. There appear to be some holes in virt-manager's authentication logic; it runs as non-root and may not always know what's going on.
virt-manager-0.9.4-4.fc18 has been submitted as an update for Fedora 18. https://admin.fedoraproject.org/updates/virt-manager-0.9.4-4.fc18
virt-manager-0.9.4-4.fc18 has been pushed to the Fedora 18 stable repository. If problems still persist, please make note of it in this bug report.