I had been suffering from the same problem, slow installation of Debian
Etch within a virtual machine and DSC timeouts.  However, after
installing the kvm and virt-manager packages from TJ's PPA site (listed
here: http://ubuntuforums.org/showthread.php?t=876695) the problem
appears to be completely resolved.

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KVM very, very slow with RedHat and Solaris guests
https://bugs.launchpad.net/bugs/239355
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