Can KVM suspend or shutdown guests automatically on host shutdown?

Yes.

The virsh shutdown command (or other implementations of "shutdown" using libvirt, as in virt-manager) instructs the guest OS to shut down cleanly. From the man page:

   shutdown domain-id

   Gracefully shuts down a domain.  This coordinates with the domain
   OS to perform graceful shutdown, so there is no guarantee that it
   will succeed, and may take a variable length of time depending on
   what services must be shutdown in the domain.

   The exact behavior of a domain when it shuts down is set by the
   on_shutdown parameter in the domain’s XML definition.

With KVM, this should send an ACPI system_powerdown event.

In Fedora and RHEL 6, a libvirt-guests init script comes out of the box configured to suspend all guests on system shutdown. It's not particularly magic, though, so one could copy this to CentOS 5 with little modification.

This is now a standard feature in recent Fedora and RHEL 6.