KVM is a virtualization hypervisor for linux
As of November, 2012 and on ubuntu 12.04 disk I/O was actually better with a qcow2 image that had preallocate=metadata option done to it. Raw disk I/O was slightly lower. As cache has been disabled in both instances it's unclear why this is the case when all information online points to a raw disk image would be better.
qemu-img info /path/to/file.qcow2
sudo lvcreate -L 12345678b -n kvm_vm1 vg0
where 12345678 is the size you got from above command. Remember the b at the endsudo qemu-img convert /path/to/file.qcow2 -O host_device /dev/mapper/vg0-kvm_vm1
virsh edit vm1
and change it from this<disk type='file' device='disk'> <driver name='qemu' type='qcow2' cache='none'/> <source file='/srv/kvm/vm1/disk0.qcow2'/> <target dev='vda' bus='virtio'/> <address type='pci' domain='0x0000' bus='0x00' slot='0x05' function='0x0'/> </disk>
<disk type='block' device='disk'> <driver name='qemu' type='raw' cache='none'/> <source dev='/dev/mapper/vg0-kvm_vm1'/> <target dev='vda' bus='virtio'/> <address type='pci' domain='0x0000' bus='0x00' slot='0x05' function='0x0'/> </disk>
sudo lvcreate -L 12345678b -n kvm_vm1 vg0
where 12345678 is the size you got from above command. Remember the b at the endsudo qemu-img convert /dev/mapper/vg0-kvm_vm1 -O qcow2 -o preallocation=metadata /srv/kvm/vm1/disk0.qcow2
virsh edit vm1
and change it from this<disk type='block' device='disk'> <driver name='qemu' type='raw' cache='none'/> <source dev='/dev/mapper/vg0-kvm_vm1'/> <target dev='vda' bus='virtio'/> <address type='pci' domain='0x0000' bus='0x00' slot='0x05' function='0x0'/> </disk>
<disk type='file' device='disk'> <driver name='qemu' type='qcow2' cache='none'/> <source file='/srv/kvm/vm1/disk0.qcow2'/> <target dev='vda' bus='virtio'/> <address type='pci' domain='0x0000' bus='0x00' slot='0x05' function='0x0'/> </disk>