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Running on Intel Nehalem (or older Penryn) processor, a KVM domain is created using virt-manager. After instalation, the domain's processor is changed to match the host's CPU. The domain is then unable to start:
2012-02-06 17:49:15.985+0000: 20757: error : qemuBuildCpuArgStr:3565 : internal error guest CPU is not compatible with host CPU
Moreover, clicking "Copy host cpu configuration" in virt-manager will show "Pentium III" instead of Nehalem/Penryn.
In /usr/share/libvirt/cpu_map.xml we can see which flags define what CPU model. If we take a look at Nehalem/Penryn definition, we can see this:
<feature name='nx'/>
which means nx flag needs to be presented to identify CPU as Nehalem/Penryn. However, taking look into /proc/cpuinfo we can see this flag is missing.