Comment 13 for bug 405388

I also have the issue on a base Lucid install, and there's a real issue there, which is not fixed in Lucid at least. There are two problems:

* the qemu://session thing, already discussed above;
* the permissions on /var/lib/libvirt/*.

When you try and create a machine, the user trying to create it is the one connected to qemu; it must be in the libvirtd group to run, so far so good. BUT:

* qemu://session makes it so that the configuration of the VM is stored in $HOME/.libvirt, not in /var/lib/libvirt;
* however, images are still created in /var/lib/libvirt/images!

The image creation fails, because all directories in /var/lib/libvirt are 755,root,root. I changed them to 770,root,libvirtd and the problem is fixed. But that's only a workaround.

I don't know, really, where VMs should be stored in a qemu://session thing, but I quite surmise that it shouldn't be in /var/lib/libvirt/images to start with.