This issue has been fixed in upstream with a patch here: http://lists.gnu.org/archive/html/qemu-devel/2010-04/msg00377.html
I rebuild qemu-kvm package with the patch and PXE boot works again for me.
- Bug#575628: pxe not working with libvirt 0.7.7 + qemu... Konstantin Stepanyuk
- Bug#575628: pxe not working with libvirt 0.7.7 +... Michael Tokarev
