I'm really not certain, but I would guess other processes would start
hogging the cpu because their writes are being serialized with bulk
writes by the guest?

It seems some filesystems (XFS, ext3?) should be immune to this, so if
you have a spare partition then you could try using a different
underlying filesystem for the guest backing file.  An LVM would also
work.

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https://bugs.launchpad.net/bugs/973536

Title:
  kvm brings Oneiric host to a grinding halt

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