I get a similar error (see below the output that was left in my putty console by the time it failed). My hardware does support virtualization (see output below) -------------------------------- Check for hardware support -------------------------------- hypervisor@hypervisor:~$ sudo egrep '(vmx|svm)' --color=always /proc/cpuinfo [sudo] password for hypervisor: flags : fpu vme de pse tsc msr pae mce cx8 apic sep mtrr pge mca cmov pat pse36 clflush dts acpi mmx fxsr sse sse2 ss ht tm pbe syscall nx rdtscp lm constant_tsc arch_perfmon pebs bts rep_good nopl xtopology nonstop_tsc aperfmperf pni pclmulqdq dtes64 monitor ds_cpl vmx smx est tm2 ssse3 cx16 xtpr pdcm pcid sse4_1 sse4_2 x2apic popcnt tsc_deadline_timer aes xsave avx lahf_lm ida arat epb xsaveopt pln pts dtherm tpr_shadow vnmi flexpriority ept vpid flags : fpu vme de pse tsc msr pae mce cx8 apic sep mtrr pge mca cmov pat pse36 clflush dts acpi mmx fxsr sse sse2 ss ht tm pbe syscall nx rdtscp lm constant_tsc arch_perfmon pebs bts rep_good nopl xtopology nonstop_tsc aperfmperf pni pclmulqdq dtes64 monitor ds_cpl vmx smx est tm2 ssse3 cx16 xtpr pdcm pcid sse4_1 sse4_2 x2apic popcnt tsc_deadline_timer aes xsave avx lahf_lm ida arat epb xsaveopt pln pts dtherm tpr_shadow vnmi flexpriority ept vpid flags : fpu vme de pse tsc msr pae mce cx8 apic sep mtrr pge mca cmov pat pse36 clflush dts acpi mmx fxsr sse sse2 ss ht tm pbe syscall nx rdtscp lm constant_tsc arch_perfmon pebs bts rep_good nopl xtopology nonstop_tsc aperfmperf pni pclmulqdq dtes64 monitor ds_cpl vmx smx est tm2 ssse3 cx16 xtpr pdcm pcid sse4_1 sse4_2 x2apic popcnt tsc_deadline_timer aes xsave avx lahf_lm ida arat epb xsaveopt pln pts dtherm tpr_shadow vnmi flexpriority ept vpid flags : fpu vme de pse tsc msr pae mce cx8 apic sep mtrr pge mca cmov pat pse36 clflush dts acpi mmx fxsr sse sse2 ss ht tm pbe syscall nx rdtscp lm constant_tsc arch_perfmon pebs bts rep_good nopl xtopology nonstop_tsc aperfmperf pni pclmulqdq dtes64 monitor ds_cpl vmx smx est tm2 ssse3 cx16 xtpr pdcm pcid sse4_1 sse4_2 x2apic popcnt tsc_deadline_timer aes xsave avx lahf_lm ida arat epb xsaveopt pln pts dtherm tpr_shadow vnmi flexpriority ept vpid ----------------------------- Attempt to create virtual machine by running the following command (with "sudo"): vmbuilder kvm ubuntu \ --dest=/home/hypervisor/[path]\ --overwrite \ --mem=1024 \ --cpus=1 \ --rootsize=7168 \ --swapsize=1024 \ --addpkg=openssh-server \ --addpkg=vim \ --addpkg=cron \ --addpkg=acpid \ --addpkg=ubuntu-desktop \ --addpkg=xrdp \ --addpkg=nano \ --addpkg=firestarter \ --addpkg=build-essential \ --addpkg=cdbs \ --addpkg=debhelper \ --addpkg=python-setuptools \ --arch=amd64 \ --suite=precise \ --ip=[address] \ --mask=255.255.255.0 \ --bcast=192.168.0.255 \ --gw=[address] \ --flavour virtual \ --components main,universe,restricted \ --hostname [name]\ --user [user]\ --pass [pass]\ --libvirt qemu:///system \ --bridge=br0; --------------------------------- --------------------------------- Output --------------------------------- 2012-11-26 21:29:59,879 INFO : 2012-11-26 21:29:59,879 INFO : Warning: Fake initctl called, doing nothing 2012-11-26 21:29:59,880 INFO : 2012-11-26 21:29:59,880 INFO : Warning: Fake initctl called, doing nothing 2012-11-26 21:30:11,650 INFO : invoke-rc.d: policy-rc.d denied execution of force-reload. 2012-11-26 21:30:43,598 INFO : invoke-rc.d: policy-rc.d denied execution of start. 2012-11-26 21:30:49,146 INFO : invoke-rc.d: policy-rc.d denied execution of start. 2012-11-26 21:30:51,057 INFO : aspell-autobuildhash: processing: en [en-common] 2012-11-26 21:30:51,380 INFO : aspell-autobuildhash: processing: en [en-variant_0] 2012-11-26 21:30:51,386 INFO : aspell-autobuildhash: processing: en [en-variant_1] 2012-11-26 21:30:51,398 INFO : aspell-autobuildhash: processing: en [en-variant_2] 2012-11-26 21:30:51,409 INFO : aspell-autobuildhash: processing: en [en_CA-w_accents-only] 2012-11-26 21:30:51,423 INFO : aspell-autobuildhash: processing: en [en_CA-wo_accents-only] 2012-11-26 21:30:51,437 INFO : aspell-autobuildhash: processing: en [en_GB-ise-w_accents-only] 2012-11-26 21:30:51,451 INFO : aspell-autobuildhash: processing: en [en_GB-ise-wo_accents-only] 2012-11-26 21:30:51,465 INFO : aspell-autobuildhash: processing: en [en_GB-ize-w_accents-only] 2012-11-26 21:30:51,479 INFO : aspell-autobuildhash: processing: en [en_GB-ize-wo_accents-only] 2012-11-26 21:30:51,494 INFO : aspell-autobuildhash: processing: en [en_US-w_accents-only] 2012-11-26 21:30:51,507 INFO : aspell-autobuildhash: processing: en [en_US-wo_accents-only] 2012-11-26 21:31:57,488 INFO : invoke-rc.d: policy-rc.d denied execution of start. 2012-11-26 21:32:17,657 INFO : Adding saned group and user... 2012-11-26 21:32:18,488 INFO : Removing any system startup links for /etc/init.d/saned ... 2012-11-26 21:32:18,516 INFO : invoke-rc.d: policy-rc.d denied execution of start. 2012-11-26 21:32:19,641 INFO : WARNING:softwarecenter.db.update:Failed to setup dbus (ignoring) 2012-11-26 21:32:19,646 INFO : INFO:softwarecenter.db.pkginfo_impl.aptcache:aptcache.open() 2012-11-26 21:32:42,750 INFO : invoke-rc.d: policy-rc.d denied execution of restart. 2012-11-26 21:32:54,214 INFO : 2012-11-26 21:32:54,214 INFO : Current default time zone: 'Etc/UTC' 2012-11-26 21:32:54,217 INFO : Local time is now: Mon Nov 26 21:32:54 UTC 2012. 2012-11-26 21:32:54,217 INFO : Universal Time is now: Mon Nov 26 21:32:54 UTC 2012. 2012-11-26 21:32:54,217 INFO : Extracting templates from packages: 100% 2012-11-26 21:33:23,803 INFO : gpg: key []: "Ubuntu Archive Automatic Signing Key