Tried it, and pv-grub gets converted to "grub (legacy)", and "grub 2" is also available as a "kernel" after switching to KVM. As well as "direct disk" :)
Edit: However, a system that had the debian pv-grub-menu package installed to create its menu.lst won't boot with "grub (legacy)". Installing grub-pc and using the grub 2 option also failed, with "error: hd0 cannot get C/H/S values" Interesting, never had trouble booting grub from kvm before.
Edit: However, a system that had the debian pv-grub-menu package installed to create its menu.lst won't boot with "grub (legacy)". Installing grub-pc and using the grub 2 option also failed, with "error: hd0 cannot get C/H/S values" Interesting, never had trouble booting grub from kvm before.