I am having the same issue, and after several hours of research spread
across several days, I've come to this bug.

I agree with mohanv in that it should not have let me setup the node if
it won't work with UEC.

If kvm requires hardware supported virtual machines hvm, (as indicated
here: http://open.eucalyptus.com/forum/problem-node-registration), then
I would like to request that the node installation process either:

A) Prevents you from installing and gives you an explanation (you hardware is 
not compatible: hvm required for kvm)
OR
B) The node installation asks if you would like to use xen.

-- 
kvm disabled in bios (was: Unable to start EUC instances - no supported 
architecture for os type 'hvm')
https://bugs.launchpad.net/bugs/452323
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