I had a similar issue on my rhel6.1 host, I had to enable virtualization in the system bios.

From: libvirt-users-bounces@redhat.com [mailto:libvirt-users-bounces@redhat.com] On Behalf Of Nitin Nikam
Sent: Thursday, January 12, 2012 9:46 AM
To: libvirt-users@redhat.com
Subject: [libvirt-users] virt-install Error

Hi All,
   I'm trying to install a VM on host OS (Redhat 6.1, KVM hypervisor).
I've installed all the required RPMs for KVM and libvirt tools.

Here is the list of libvirt RPMs and KVM modules

kvm.ko
kvm-intel.ko

libvirt-0.8.7-18.el6.x86_64.rpm         libvirt-java-devel-0.4.7-1.el6.noarch.rpm  virt-top-1.0.4-3.8.el6.x86_64.rpm
libvirt-client-0.8.7-18.el6.x86_64.rpm  libvirt-python-0.8.7-18.el6.x86_64.rpm     virt-viewer-0.2.1-3.el6.x86_64.rpm
libvirt-devel-0.8.7-18.el6.x86_64.rpm   python-virtinst-0.500.5-3.el6.noarch.rpm   virt-what-1.3-4.4.el6.x86_64.rpm
libvirt-java-0.4.7-1.el6.noarch.rpm     virt-manager-0.8.6-4.el6.noarch.rpm

qemu-img-0.12.1.2-2.160.el6.x86_64.rpm  qemu-kvm-0.12.1.2-2.160.el6.x86_64.rpm

When I execute virt-install command I see the below error:

[root@nsn /]# virt-install

ERROR    Host does not support any virtualization options

I've already cross checked the VMX setting in BIOS and it is enabled.
In VMX Feature MSR register , VT bit is set.

Following is some info about the platform:
[root@nsn /]# uname -a
Linux rsp3-linux 2.6.32.27 #170 SMP PREEMPT Thu Jan 12 09:03:12 IST 2012 x86_64 GNU/Linux

[root@nsn /]# cat /proc/cpuinfo
processor       : 3
vendor_id       : GenuineIntel
cpu family      : 6
model           : 30
model name      : Intel(R) Xeon(R) CPU           C5528  @ 2.13GHz
stepping        : 4
cpu MHz         : 2127.723
cache size      : 8192 KB
physical id     : 0
siblings        : 4
core id         : 3
cpu cores       : 4
apicid          : 6
initial apicid  : 6
fpu             : yes
fpu_exception   : yes
cpuid level     : 11
wp              : yes
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 rdtscp lm constant_tsc arch_perfmon pebs bts rep_good xtopology nonstop_tsc aperfmperf pni dtes64 monitor ds_cpl vmx est tm2 ssse3 cx16 xtpr pdcm dca sse4_1 sse4_2 popcnt lahf_lm ida tpr_shadow vnmi flexpriority ept vpid
bogomips        : 4259.94
clflush size    : 64
cache_alignment : 64
address sizes   : 40 bits physical, 48 bits virtual
power management:

[root@nsn /]# lsmod | grep kvm
kvm_intel 36839 0 - Live 0xffffffffa016c000
kvm 149478 1 kvm_intel, Live 0xffffffffa0137000

has anyone encountered similar issues while using libvirt tools?
am I missing something w.r.t installation?

Appreciate your feedback.

Thanks,
kenden