Peter,
Saw your entry about the virtual manager returning a permission denied fault when trying to access a virtual image. I had the same problem when upgrading to FC12 — a WinXP image that worked fine on FC11 gave me the same “permission denied” fault with FC12. I could start the image directly using qemu-kvm.
So, I just started taking stabs in the dark. I noticed my home directory (/home/bob) had permissions of 770. I changed it to 771 and “things” now work.
I’d like to claim I really understand what’s going on, but I’m not a good liar!