I know this thread is old but I was searching for this exact problem and was having a tough time with it.
Here is the solution I found:
Setup:
Macbook Pro running Mac OS X 10.7.3
Dell R210 Server running Ubuntu 10.04 with KVM-QEMU installed
Settings on Mac
Command on serverMacBook-Pro:~ user$ cat ~/.ssh/config
ServerAliveInterval=60
ForwardX11=yes
MacBook-Pro:~ user$
If you get something along the lines ofroot@vmhost1:~# virt-viewer name-of-VM
Log out and log back in. Try virt-viewer again, and it should work.(virt-viewer:2399): Gtk-WARNING **: cannot open display: localhost:10.0
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