Comment 1 for bug 911873

I forgot something -- after "interface = (virbr1, br0, or whatever)" you need to add:
  bind-interfaces
Otherwise dnsmasq will still bind to all interfaces instead of just the assigned interface.

Another thing worth mentioning is that virt-manager / libvirt uses dnsmasq internally. It gets VERY upset if you try and run Cobbler on a bridged interface. What you need to do is create a bridge with no assigned interfaces in /etc/network/interfaces (I called mine 'vmpxe' -- Virtual Machine PXE), give it an IP address and so forth, and attach Orchestra's dnsmasq instance to that interface. Then when you create the VM, attach the network adapter to that interface (i.e. "specify shared device name", then the name of the bridge)