libvirt is an abstraction layer and a daemon for managing virtual machines -- remote or locally, using multiple virtualization backends (QEMU/KVM, VirtualBox, Xen, etc).
Currently libvirt and tools are only available from AUR. If you are unfamiliar with how to install AUR packages, see: Arch User Repository.
For servers you need the libvirt package from AUR and qemu-kvm, dnsmasq and bridge-utils from Arch repositories.
To run the libvirt daemon:
sudo /etc/rc.d/libvirtd start
If you want to start it at boot, edit /etc/rc.conf and add libvirtd to the DAEMONS= line.
??? I never got this to work. To allow yourself to manage VMs as non-root, run:
sudo polkit-auth --user $USERNAME --grant org.libvirt.unix.manage
Enable KVM acceleration
Note: KVM will conflict with VirtualBox. You cannot use KVM and VirtualBox at the same time.
Running virtual machines with the usual QEMU emulation will be painfully slow, so you definitely want to enable KVM support if your CPU supports it.
To enable KVM, you need to load the kvm-amd or kvm-intel kernel module.
If KVM support is not available, you will find the following message in your /var/log/libvirt/qemu/SOMENAME.log:
Could not initialize KVM, will disable KVM support