I have reproduced bug. 
I have "asus" and "kvm" with karmic as host os (it's ok for jaunty).
# uname -a
Linux kvm 2.6.31-14-generic #48-Ubuntu SMP Fri Oct 16 14:05:01 UTC 2009 x86_64 GNU/Linux

There's no problem with DNS: "asus" and "kvm" resolved corectly on both hosts.
Both hosts has
1.
listen_tls = 0
listen_tcp = 1
auth_tcp = "none"
in /etc/libvirt/libvirtd.conf
2.  
libvirtd_opts="-d -l"
in /etc/default/libvirt-bin
3. 
Turned off apparmor with command `sudo invoke-rc.d apparmor stop`

I have fresh installed XP as guest (also tried with Win 2008 x64 with same results). 

# virsh --connect=qemu+tcp://kvm/system list
Connecting to uri: qemu+tcp://kvm/system
 Id Name                 State
----------------------------------
  5 xp                   running

It pings (rdp session work too), and of course it works through vnc.

When I try to migrate it.
# virsh --connect=qemu+tcp://kvm/system migrate --live xp qemu+tcp://asus/system

I get in /var/log/syslog and /var/log/libvirt/qemu/xp.log (time on both host is syncronized)

Oct 29 12:31:39 asus kernel: [ 7868.432787] device vnet0 entered promiscuous mode
Oct 29 12:31:39 asus kernel: [ 7868.434144] breth0: port 2(vnet0) entering learning state

==> /var/log/libvirt/qemu/xp.log <==
LC_ALL=C LD_LIBRARY_PATH=/usr/local/lib PATH=/usr/local/sbin:/usr/local/bin:/sbin:/bin:/usr/sbin:/usr/bin HOME=/root USER=root LOGNAME=root /usr/bin/kvm -S -M pc-0.11 -m 512 -smp 1 -name xp -uuid 02f32130-6933-6594-544e-7b12fa1bbd34 -monitor unix:/var/run/libvirt/qemu/xp.monitor,server,nowait -boot c -drive file=/mnt/nfs/images/xp.img,if=ide,index=0,boot=on -drive file=/mnt/nfs/iso/R10.iso,if=ide,media=cdrom,index=2 -net nic,macaddr=54:52:00:17:57:79,vlan=0,name=nic.0 -net tap,fd=18,vlan=0,name=tap.0 -serial pty -parallel none -usb -usbdevice tablet -vnc 0.0.0.0:0 -k en-us -vga cirrus -incoming tcp:0.0.0.0:49154
char device redirected to /dev/pts/0

==> /var/log/syslog <==
Oct 29 12:31:48 asus kernel: [ 7877.430637] breth0: port 2(vnet0) entering forwarding state
Oct 29 12:31:49 asus kernel: [ 7878.472528] vnet0: no IPv6 routers present

==> /var/log/syslog <==
Oct 29 12:33:06 kvm kernel: [ 4912.152966] breth0: port 2(vnet0) entering disabled state
Oct 29 12:33:06 kvm kernel: [ 4912.192109] device vnet0 left promiscuous mode
Oct 29 12:33:06 kvm kernel: [ 4912.192112] breth0: port 2(vnet0) entering disabled state


And just after migration guest xp hangs (not answer on keyboard and mouse in vnc console), no reply on `ping xp` anymore.

# virsh --connect=qemu+tcp://kvm/system list
Connecting to uri: qemu+tcp://kvm/system
 Id Name                 State
----------------------------------

# virsh --connect=qemu+tcp://asus/system list
Connecting to uri: qemu+tcp://asus/system
 Id Name                 State
----------------------------------
  2 xp                   running

But If we do:

# virsh --connect=qemu+tcp://asus/system suspend xp
Connecting to uri: qemu+tcp://asus/system
Domain xp suspended

# virsh --connect=qemu+tcp://asus/system resume xp
Connecting to uri: qemu+tcp://asus/system
Domain xp resumed

XP'll become alive in vnc, and begin answer for icmp requests (or rdp sessions will continue working -- no matter how to test).
For guest xp it looked like a pause since migration.  For users of XP all sessions fails by timeout.