Thanks.  You may also want to wrap long lines, and/or use 'git
send-email' to make the patches easier to use, but for a first time
submission, this is enough to let us start review.

I'd rather see us check both limits and reject the operation up front if
we can't meet both limits, than to lower the checks down into the
live/persistent branches but risk failure with live modified when the
persistent branch finally detects failure.

It also has the benefit of being a smaller diffstat:

diff --git i/src/qemu/qemu_driver.c w/src/qemu/qemu_driver.c
index a7ef209..82d29c4 100644
--- i/src/qemu/qemu_driver.c
+++ w/src/qemu/qemu_driver.c
@@ -2242,8 +2242,16 @@ static int qemuDomainSetMemoryFlags(virDomainPtr
dom, unsigned long newmem,

    } else {
        /* resize the current memory */
+        unsigned long oldmax = 0;

-        if (newmem > vm->def->mem.max_balloon) {
+        if (flags & VIR_DOMAIN_AFFECT_LIVE)
+            oldmax = vm->def->mem.max_balloon;
+        if (flags & VIR_DOMAIN_AFFECT_CONFIG) {
+            if (!oldmax || oldmax > persistentDef->mem.max_balloon)
+                oldmax = persistentDef->mem.max_balloon;
+        }
+
+        if (newmem > oldmax) {
            virReportError(VIR_ERR_INVALID_ARG, "%s",
                           _("cannot set memory higher than max memory"));
            goto endjob;

@@ -4207,11 +4214,12 @@ qemuDomainSetVcpusFlags(virDomainPtr dom, unsigned int nvcpus,
        goto endjob;
    }

-    if (!maximum && nvcpus > vm->def->maxvcpus) {
+    maxvcpus = (flags & VIR_DOMAIN_AFFECT_LIVE) ? vm->def->maxvcpus : persistentDef->maxvcpus;

Long line.  Also, I think it suffers from the same problem - if both
_LIVE and _CONFIG are given at once, then we want to cap things at the
lower of the two limits, rather than using just the live max as the limit.