You have to allow lib-virt to use USB devices.
Edit /etc/apparmor.d/abstractions/libvirt-qemu and uncomment some lines.
# WARNING: uncommenting these gives the guest direct access to host hardware.
# This is required for USB pass through but is a security risk. You have been
Migrating vmware images to use in kvm instead is nicely described here: http://ubuntuforums.org/showthread.php?t=1163175.
For a RedHat image I simply ran:
sudo qemu-img convert -f vmdk redhat.vmdk -O qcow2 redhat.img
Create a new kvm machine in virt-manager, but temrinate when it tries to start installing. Simply reaplce the image virt-manager created with redhat.img and restart the new kvm machine.