What is the best distro to host a KVM virtualization solution

Debian 'squeeze' was released on 6th February and includes kvm/qemu 0.12.5, libvirt 0.8.3, virt-manager 0.8.4, making it the most recent stable release and carrying the most recent relevant software of the three (Debian, Ubuntu, CentOS).

The next LTS release of ubuntu is due in 12.04. The last estimate for CentOS 6 I heard was 6 months after RHAS 6, which would mean 1-2 months time, but I've no idea how accurate that is.

I would therefore pick Debian 'squeeze' or RHAS 6, if you are prepared to pay. You will then want to backport newer KVM/libvirt/virt-manager versions in the future, if you are determined to sacrifice stability for features. RHAS will most likely backport the major ones into their product, and support it. Debian will most likely provide recent versions of the software in their backports repository.

If you've already chosen to use KVM, surely using RHEL/CentOS is the best as Redhat owns it?

RHEL is the obvious choice, especially since KVM is being primarily developed for it, and tested on it. If you want the latest and greatest, then Fedora, but that would not provide the LTS you're after.

As of today, I would chose Fedora 23 Server.