Just wanted to write up and do exactly what you said: confirm that if I use the Virtual Machine Manager to change my Windows 7 guest VM from "video = vga", 9MB RAM, to "video = vmvga", also 9MB RAM, then my VM "boots" to a complete black, blank screen. I'm afraid I have no work around as yet. (This is on Centos 6.3, 64-bit, fully updated).
It makes no difference whether I switch the 'Display' option between VNC and Spice.
It also made no difference when I used virsh to manually set the amount of video memory to 128MB, in either Spice or VNC display modes.
I was able to use the qxl and cirrus video models without a drama, but both the vmvga or the xen driver models resulted in the guest blank screen at reboot.
Returning to the VNC and vmvga combinations, I saw the CPU usage graph in the Virtual Machine Manager flatline (see https://dl.dropbox.com/u/30619235/kvm01.jpg
-the black screen in the background is my Windows VM). I was not able to ping that VM from the host, so (for me, at least) it wasn't somehow 'running OK in the background'. And just to prove the point, here's the same VM after switching back to the ordinary, 9MB vga driver model (https://dl.dropbox.com/u/30619235/kvm02.jpg
): that's the Windows login screen displaying just fine on the same host as before.
If you find a workaround, I'd like to know about it! (Basically, I want aero in my Win7 VM, dumb as that might be as a wishlist item!)