Comment 18 for bug 470636

Actually, it supports backing stores just fine in both Lucid and Maverick (I use them all the time) for both storage pools and backed qemu disks (I use them all the time) and the issue you are seeing is a result of an upstream libvirt security fix, and not the AppArmor security driver.

What changed in maverick is that libvirt 0.8.3 won't automatically probe for the disk format (doing so causes various security problems), and therefore the backing store, unless the disk format is specified in the XML. Unfortunately this is not the case for virtinst, vmbuilder and any home-brewed scripts when using non-raw disk formats (raw is the default). See bug #656173 comment #7 for more details. I plan to fix virtinst in an SRU (bug #655392) as well as vmbuilder.