I suspect this is a duplicate of bug 1054129.

The question is whether the livecd kernel should be doing something to
avoid using the cirrus driver?

virt-manager should be using something other than cirrus by default.

It's also worth checking whether qemu 1.3 fixes the cirrus bug.

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https://bugs.launchpad.net/bugs/1091523

Title:
  Testing Raring in KVM displays visual artifacts (affects installer
  world map, login screen, wallpaper)

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