The "could not open disk image img.iso" problem is the easier of the two errors: that file does not exist. That argument means "mount the disk image in the file img.iso as the CD-ROM"; that file must exist (and should be a valid ISO). Try downloading a ISO of any Linux flavor, for example.
disk.img must also exist (that argument means "use the disk image contained in the file disk.img as the hard disk"). You can create it using dd, e.g.:
dd if=/dev/zero of=images/disk.img bs=512M count=20
That will create a 10GB disk image in a file called disk.img. Adjust the block size and # of blocks (bs and count) to increase or decrease the size; bs cannot be larger than available memory.
For the second problem, Could not initialize KVM, will disable KVM, there are a number of possible causes:
- disabled in BIOS
- you are not running as root (i.e. using sudo) and your user cannot access /dev/kvm
- the machine you are on is already virtualized (e.g. you are using Amazon EC2). These CPUs may have the VMX flag (because they are paravirtualized) but cannot be virtualized (because the hypervisor won't allow it.)
Note that this is NOT a fatal error; qemu can run without KVM support, it just runs in emulation mode and is quite slow.
The first problem will probably produce some output, examine the output of dmesg (dmesg | grep kvm). It can be solved by enabling it in BIOS.
The second problem can be diagnosed easily by running the commands as root instead of as a user. If that works, you have identified the problem.
The third problem is more difficult to resolve. XEN-blanket may help.
Pasting the output of "sudo kvm-ok" might be allow someone to offer more insight.
The instructions given in here would be translatable to other platforms:
https://help.ubuntu.com/community/KVM/Installation
If you provide more information about the machines you are using and your desired goals, we can be more helpful.
