I am the OP above. Following up.

Compiled the and installed the latest kvm-82 release.
With this upgrade, my lockup issues with the 20081229 virtio drivers are gone.

The version loaded by default in Lenny is kvm-72.
If you stay there, make sure you use the "windows-2" virtio drivers to avoid what I was seeing.

I figured it out in the end. I'm putting the solution here to help other people if they run into the same problem.

Windows 2008 requires the KVM-certificates to be installed to make the network driver work (it isn't sufficient to click yes on the pop-ups asking if you trust the source of the driver).

However, the installcertificate.bat file, which is meant to install the certificates, doesn't work on a clean install of Win2008. The batch-file uses certmgr.exe, which doesn't exist in Win2008 (part of .NET SDK?). A certmgr executable does exist in Win2008, but it's called certmrg.msc and is apparently only a GUI, which doesn't accept the required arguments to install the certificates.

Furthermore, testsigning needs to be turned on in Windows to make Windows accept the driver.

The following steps works for me on Win2008 64bit:
1. Doubleclick on the kvmtest.cer certificate and install it in "Trusted Root Certification Authorities".
2. After the installation has completed, doubleclick the cerfiticate again and install it to "Trusted Publishers".
3. Turn on testsigning by running the command:
"bcdedit /set testsigning on"
4. Reboot the system.
5. Install the driver by doubleclicking on the netkvminstall.exe.
6. Done...after a few moments, the new card should be up :)

I just realised that I forgot a step in my last post, causing the guide not to work on Windows 2008 64 bit...I've updated the post to include this step - perhaps it will also work on Windows 7 64bit now?

Silent,

You can expect to see these soon. See link to recent message from the mailing list:

http://www.mail-archive.com/kvm@vger.kernel.org/msg11331.html

:D

thanks man, you saved my day.

I download all the drivers! But I don't know which is for the windows2003 64 bit?

Yep. amd64 works for x86_64. 

latest version of windows virtio network drivers was released supporting Windows XP I think there was a recent release of Windows Virtio Network Drivers which I must say supports Windows Vista and Windows 7. It is a real let off that they do not support Windows XP.I had troubles using it and had to recover my files with the disaster recovery softwares. Many have asked for the release of drivers for Windows XP as well since Vista users are much less and the cost of Windows 7 is a bit high for some to afford. I am not sure whether there will be a positive response from the part of Microsoft since they already made it clear that XP is over.