Anthony Liguori has a good summary of the Blackhat paper by Jon Oberheide, Evan Cooke and Farnam Jahanian of the University of Michigan about Xensploit .
The idea of Xensploit is to use a Man in the Middle attack between 2 hosts performing a Live migration. The fundamental flaw is that by default Live migration of virtual machines is unencrypted or often even unauthenticated. Of course good network security practice isolates this kind of traffic in it’s own VLAN, but it shows that security is becoming a bigger issue day by day.
The vulnerability seems to be present with VMWare and Xen versions prior to 3.1 but according to Anthony not with KVM.