I have recently installed and configured KVM with NFS shared storage. If I use local storage I can configure a a VM with no problem. When I use my NFS shared storage I get the following error.

qemu: could not open disk image /var/lib/libvirt/images/nfs/test.img: Permission Denied

I know that it is a permissions issue because if I chmod 777 test.img I can create the machine. I see that when virt-manager installs a virtual machine on the local storge the owner is qemu but when it creates it on the nfs share the owner is root. I assume I need to create the qemu user on my NFS box?

Any help would be appreciated, im still a half noob.

NFS is typically used for simple file shares. NFS can be very slow and is not recommended for high I/O processing. Also the UID needs to be the same on both systems or you'll get problems with permissions. I would recommend iSCSI instead.

I have implemented iSCSI but I was looking for shared storage and this solution only appears to offer a physical iSCSI disk? Do you know of any shared storage tutorials? My goal is to provide live/automated migration.

I have a simular setup and It seems to work fine. On your NFS server share have you set the no_root_squash option? Otherwise the server will use the default anonamous user.