Shortened steps that work, creating a KVM instance on an Ubuntu Lucid host server.

Install these packages:
o kvm
o python-vm-builder

apt-get update && apt-get install kvm python-vm-builder

Create the destination directory for the VM to be installed into:

mkdir /data/vm/vm-name

Download the script (you should have this already)

Run the vmbuilder creation command

vmbuilder kvm ubuntu --suite=lucid --flavour=virtual --arch=amd64 \
--mirror= -o \
--libvirt=qemu:///system --dest /data/vm/test-vm1 \
--ip= --gw= \
--rootsize=100000 \
--user=USERNAME --name=’COMMENT’ --pass=PASSWD \
--addpkg=vim-nox --addpkg=unattended-upgrades \
--addpkg=openssh-server --firstboot=/home/morrowc/ \
--mem=4096 --hostname=test-vm1 --bridge=virbr0 \ --cpus=2

Use virsh to test whether the instance finished/available for startup

# virsh list --all
Id Name State
- test-vm1 shut off

Start the instance with virsh

virsh start test-vm1