I've found numerous tutorials to set up KVM with CentOS 5.5. Some refer to the Red Hat guides, which are useless in my opinion if you are not using KVM in a large server park, others come up with scripts to set up networking.
I kept searching and trying configurations until I finally found one that works. Note that among problems you might encounter is the one that plagued me for months: CentOS is attempting to bring up the virtual device for LAN access on the host before bringing up the physical interface, this fails and prevents all networking and dependencies from starting properly.
To set up the bridge devices for KVM and the host (something which is done only once to 'wire' your virtual network instide the bridge) look here. Most of the guide is still relevant even if they refer to the Red Hat documentation (which is about Red Hats cloud virtualisation platform and not a single server running KVM).
Use a configuration like this for proper KVM networking under CentOS, Red Hat and probably even Fedora.
1. Edit /etc/sysconfig/network-scripts/ifcfg-eth0 to contain something like this:
The "NM_CONTROLLED" bit seems to originate from Fedora 12/13, CentOS might ignore it altogether so you could leave it out.
2. Edit /etc/sysconfig/network-scripts/ifcfg-br0 to restore network access for your host machine:
The crucial parts in this configuration is that eth0 is started on boot and is assigned a bridge device: 'br0'. The 'br0' device is marked as a bridge device which completes the dependencies between them. So make sure if you deviate from the examples you leave the types and 'bridge=br0' in tact.