virt-manager 0.6.0 introduced support for discovering machines running libvirt on the local network. The libvirt daemon, libvirtd, advertises itself using Avahi, which uses Multicast DNS (mDNS).
First, to be sure your machine can receive mDNS advertisements, you will need to make sure that port is open on your firewall. For example, in Fedora, you can go to System->Administration->Firewall, and make sure mDNS, UDP port 5353, is open. (If this tool isn't available, 'yum install system-config-firewall').
Now, to see the libvirtd instances on your local network, bust open virt-manager, and head to File->Add Connection:
Move the second drop down to select one of the 'remote' options. This should activate the browser window and auto-populate any local connections:
From there, you can just select an entry in the list and hit 'Connect'.
FYI, you can customize the string that libvirtd advertises. Edit /etc/libvirt/libvirtd.conf and look for 'the mdns_name' option. Uncomment and put in your own value. Restart libvirtd with 'service libvirtd restart', and the new string should be advertised:
Troubleshooting:
At the very least, your local machine should show up in the list. If you aren't seeing expected results, you can try:
'avahi-browse _libvirt._tcp' If the results differ from what you see in virt-manager, please file a bug. (avahi-browse requires the avahi-tools package on Fedora)
If that produces nothing new, make sure that libvirtd is running on the machines you expect to see, and that mdns_adv is commented out or equal to 1 in /etc/libvirt/libvirtd.conf (should be the default).
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