It turned out this was because we had the same MAC address for the host and guest NICs (long and complex story as to why this arose). Suffice to say that once we changed the guest MAC address, the problem went away.
Host OS: Centos 5.2 64bit
Host networking: eth0 only
Guest OS: Fedora 12 64bit
Guest Networking: bridged, guest eth0 -> host eth1
Hardware: 8cpu, 16G memory, Intel
Recent updates to Fedora 12 seem to have made my guest system unbootable. In checking back through the logs after reverting to an earlier version, I notice that there were many messages about
eth0: IPv6 duplicate address detected!
in the guest (but not the host). One possibility is that fedora is getting stricter about enforcing IPv6 requirements, which might explain why the updated guest hangs early in the boot process (separately, because of recent F12 changes to X11, I can't actually see the boot process until the system finally reads Xorg.conf at the end of the boot process, so this is devilishly difficult to debug). I'm guessing that the duplicate address message may have to do with the guest getting allocated the same IPv6 address as the host (not sure if bridged networking works similarly to bonding; I note that there is a current kernel bug report about IPv6 DAD not working properly for bonded devices).
The simplest way to check this would probably be to turn off guest IPv6 completely, or maybe simpler, set up a suitable fixed IPv6 address for it. Unfortunately I have no idea whatever how IPv6 works in detail, or how Fedora interacts with it, and haven't succeeded in figuring it out. Can anyone suggest a way to do this, so I can check if this is the root cause of the problems? I am using Network Manager in the guest, but can't figure how to suitably set up (or disable) IPv6; there's a lot of documentation around, but it seems very unclear (possibly because it's changing rapidly) about where IPv6 can be disabled - kernel option, kernel module, configuration files, ....
Also, if anyone is running F12 with bridged networking, please can you confirm whether you are also seeing IPv6 duplicate addresses?
Thanks and Best Wishes