Can you please upgrade to the latest intrepid, logout, and then log back
in and retry?

I have recently added hal configuration to kvm, and I think this will
fix your problem.

If that does not fix it, could you please post the results of:
 # ls -alF /dev/kvm

Thanks,
:-Dustin

** Changed in: virt-manager (Ubuntu)
       Status: Confirmed => Incomplete

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virt-manager reports 'permission denied on /dev/kvm' when user is already in 
kvm group
https://bugs.launchpad.net/bugs/254092
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