I am use libvirt master branch to test LXC , the lastest commit of the master branch is 03d813bbcd7b4a18360105500672b84d985dd889,
by Marek Marczykowski <marmarek@invisiblethingslab.com>
on Thu May 23 02:01:30 2013 +0200,

root@wheezy:/tmp# cat test.xml
<domain type='lxc'>
<name>vmtest</name>
<memory>500000</memory>
<os>
    <type>exe</type>
    <cmdline>console=ttyS0</cmdline>
    <init>/sbin/init</init>
</os>
<vcpu>1</vcpu>
<clock offset='utc'/>
<on_poweroff>destroy</on_poweroff>
<on_reboot>restart</on_reboot>
<on_crash>destroy</on_crash>
<devices>
    <filesystem type="mount">
      <source dir="/tmp/x"/>
      <target dir="/"/>
    </filesystem>
    <emulator>/usr/libexec/libvirt_lxc</emulator>
    <interface type='network'>
      <source network='default'/>
    </interface>
    <console type='pty' />
</devices>
</domain>
root@wheezy:/tmp# virsh -c lxc:/// define test.xml
Domain vmtest defined from test.xml

root@wheezy:/tmp# virsh -c lxc:/// start vmtest
error: Failed to start domain vmtest
error: internal error Child process (PATH=/usr/local/sbin:/usr/local/bin:/usr/sbin:/usr/bin:/sbin:/bin LIBVIRT_DEBUG=3 LIBVIRT_LOG_OUTPUTS=3:stderr /usr/libexec/libvirt_lxc --name vmtest --console 19 --security=none --handshake 22 --background --veth veth7) unexpected exit status 1

below's a libvirtd log
2013-05-25 14:46:58.727+0000: 7865: error : virCommandWait:2354 : internal error Child process (PATH=/usr/local/sbin:/usr/local/bin:/usr/sbin:/usr/bin:/sbin:/bin LIBVIRT_DEBUG=3 LIBVIRT_LOG_OUTPUTS=3:stderr /usr/libexec/libvirt_lxc --name vmtest --console 19 --security=none --handshake 22 --background --veth veth7) unexpected exit status 1