For RHEL 5 and CentOS 5, I found KVM to be useless. The management tool is not good, and the bridged networking requirement is very awkward, and it performed like a dog being beaten with a missing leg.
What guest OS have you tried? RHEL5.4 and up come with Virtio drivers so using virtio devices RHEL 5.4+guests will provide good preformance
I'm interested in trying it for RHEL 6 and CentOS 6,
Indeed you should see performance boost on RHEL6
but until then I'm personally relying on VMWare ESX for institution virtualization,
Then you should compare to RHEV and not to RHEL + virt-manager (RHEV also has Virtio drivers for windows guests)
and Virtualbox because it's a much more usable configuration interface tool and uses "Right-Ctrl" to release the mouse from the virtualized console instead of "Ctrl-Alt".
With RHEV you'll have SPICE, that does not need both as after installation of the guest tools it does not grab the mouse.
VMWare could learn a lot from Sun's and now Oracle's efforts with that tool.