I think you will also need to add
virt-viewer
 to the dependency list. 

This is the error I had when I tried to install a virtual machine with 
virt-install:
Unable to connect to graphical console: virt-viewer not installed. Please 
install the 'virt-viewer' package.

More details from the session enclosed below.

[EMAIL PROTECTED]:/var/opt/kvm$ sudo virt-install
What is the name of your virtual machine? eagle
 How much RAM should be allocated (in megabytes)? 512
 What would you like to use as the disk (file path)? /var/opt/kvm/eagle
 How large would you like the disk (/var/opt/kvm/eagle) to be (in gigabytes)? 6
 Would you like to enable graphics support? (yes or no) yes
 What is the virtual CD image, CD device or install location? 
/var/opt/kvm/ubuntu-7.10-server-amd64.iso
 

Starting install...
libvir: QEMU error : 
libvir: QEMU error : 
libvir: QEMU error : 
Creating storage file...  100% |=========================| 6.0 GB    00:00     
Creating domain...                                                 0 B 00:00 
Unable to connect to graphical console: virt-viewer not installed. Please 
install the 'virt-viewer' package.
Domain installation still in progress.  You can reconnect to 
the console to complete the installation process.
[EMAIL PROTECTED]:/var/opt/kvm$ sudo apt-get install virt-viewer

-- 
Missing dependencies in packaging of python-libvirt 
https://bugs.launchpad.net/bugs/210307
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