I'm probably wrong, but are you sure that vnet0 needs to be listed? vnet0 is usually a nic bridged to either br0 or virbr0. i would think that dnsmasq would ignore bridged interfaces.
In fact, using just 'except-interface=virbr0' I brought up a kvm guest (which had vnet0 as its nic on the host), and the libvirt dnsmasq was the one to provide it with an ip address.
@Thomas,
I'm probably wrong, but are you sure that vnet0 needs to be listed? vnet0 is usually a nic bridged to either br0 or virbr0. i would think that dnsmasq would ignore bridged interfaces.
In fact, using just 'except- interface= virbr0' I brought up a kvm guest (which had vnet0 as its nic on the host), and the libvirt dnsmasq was the one to provide it with an ip address.