>Is this caused by KVM not supporting real mode on Intel hosts, or is it caused
>by some other reason?
Yes, it is correct. Ubuntu 7.04/7.10 won't work anytime soon.
There are few workarounds:
1. use text-mode bootloader
2. use special patches for KVM (not included in mainline, but in Alexander
Graf's tree)
(this is ugly hack, so it was not accepted into mainline KVM)
3. use special patches for Graphical GFX GRUB
But do not worry; newer Linux operating systems 2008 fix this problem with
solution #3.
i.e. openSUSE 11.x and Ubuntu 8.x won't have this problem (tested with several
Alphas)
-Alexey "Technologov", Qumranet QA Team Member
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