I'm having exactly the same problem in intrepid when trying the incognito 
livecd (http://anonymityanywhere.com/incognito/) with the following command:
kvm -m 512 -cdrom incognito-i686-2008.1-r1.iso

It is especially noticeable at boot: when the cpu is used at 100%,
switch to another worspace; it will fall to 0% and the livecd won't
continue to boot till you switch back to its workspace.

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kvm/qemu makes no progress updating Windows when not on visible workspace
https://bugs.launchpad.net/bugs/105605
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