diff --git a/bin/dhcpleasor.py b/bin/dhcpleasor.py
index 07ff325f..4a3f374d 100755
--- a/bin/dhcpleasor.py
+++ b/bin/dhcpleasor.py
@@ -71,7 +71,7 @@ def main(argv=None):
         FLAGS.fake_rabbit = True
         FLAGS.redis_db = 8
         FLAGS.network_size = 32
-        FLAGS.fake_libvirt=True
+        FLAGS.connection_type = 'fake'
         FLAGS.fake_network=True
         FLAGS.fake_users = True
     action = argv[1]
diff --git a/docs/fakes.rst b/docs/fakes.rst
index bea8bc4e..a993fb4c 100644
--- a/docs/fakes.rst
+++ b/docs/fakes.rst
@@ -18,10 +18,10 @@
 Nova Fakes
 ==========
 
-The :mod:`fakevirt` Module
+The :mod:`virt.fake` Module
 --------------------------
 
-.. automodule:: nova.fakevirt
+.. automodule:: nova.virt.fake
     :members:
     :undoc-members:
     :show-inheritance:
diff --git a/nova/endpoint/cloud.py b/nova/endpoint/cloud.py
index 3b7b4804..51f5c859 100644
--- a/nova/endpoint/cloud.py
+++ b/nova/endpoint/cloud.py
@@ -39,6 +39,7 @@ from nova.auth import users
 from nova.compute import model
 from nova.compute import network
 from nova.compute import node
+from nova.compute.instance_types import INSTANCE_TYPES
 from nova.endpoint import images
 from nova.volume import storage
 
@@ -103,7 +104,7 @@ class CloudController(object):
         result = {}
         for instance in self.instdir.all:
             if instance['project_id'] == project_id:
-                line = '%s slots=%d' % (instance['private_dns_name'], node.INSTANCE_TYPES[instance['instance_type']]['vcpus'])
+                line = '%s slots=%d' % (instance['private_dns_name'], INSTANCE_TYPES[instance['instance_type']]['vcpus'])
                 if instance['key_name'] in result:
                     result[instance['key_name']].append(line)
                 else:
diff --git a/nova/fakevirt.py b/nova/fakevirt.py
deleted file mode 100644
index bcbeae54..00000000
--- a/nova/fakevirt.py
+++ /dev/null
@@ -1,112 +0,0 @@
-# vim: tabstop=4 shiftwidth=4 softtabstop=4
-
-# Copyright 2010 United States Government as represented by the
-# Administrator of the National Aeronautics and Space Administration.
-# All Rights Reserved.
-#
-#    Licensed under the Apache License, Version 2.0 (the "License"); you may
-#    not use this file except in compliance with the License. You may obtain
-#    a copy of the License at
-#
-#         http://www.apache.org/licenses/LICENSE-2.0
-#
-#    Unless required by applicable law or agreed to in writing, software
-#    distributed under the License is distributed on an "AS IS" BASIS, WITHOUT
-#    WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied. See the
-#    License for the specific language governing permissions and limitations
-#    under the License.
-
-"""
-A fake (in-memory) hypervisor+api. Allows nova testing w/o KVM and libvirt.
-"""
-
-import StringIO
-from xml.etree import ElementTree
-
-
-class FakeVirtConnection(object):
-    # FIXME: networkCreateXML, listNetworks don't do anything since
-    # they aren't exercised in tests yet
-
-    def __init__(self):
-        self.next_index = 0
-        self.instances = {}
-
-    @classmethod
-    def instance(cls):
-        if not hasattr(cls, '_instance'):
-            cls._instance = cls()
-        return cls._instance
-
-    def lookupByID(self, i):
-        return self.instances[str(i)]
-
-    def listDomainsID(self):
-        return self.instances.keys()
-
-    def listNetworks(self):
-        return []
-
-    def lookupByName(self, instance_id):
-        for x in self.instances.values():
-            if x.name() == instance_id:
-                return x
-        raise Exception('no instance found for instance_id: %s' % instance_id)
-
-    def networkCreateXML(self, xml):
-        pass
-
-    def createXML(self, xml, flags):
-        # parse the xml :(
-        xml_stringio = StringIO.StringIO(xml)
-
-        my_xml = ElementTree.parse(xml_stringio)
-        name = my_xml.find('name').text
-
-        fake_instance = FakeVirtInstance(conn=self,
-                                         index=str(self.next_index),
-                                         name=name,
-                                         xml=my_xml)
-        self.instances[str(self.next_index)] = fake_instance
-        self.next_index += 1
-
-    def _removeInstance(self, i):
-        self.instances.pop(str(i))
-
-
-class FakeVirtInstance(object):
-    NOSTATE = 0x00
-    RUNNING = 0x01
-    BLOCKED = 0x02
-    PAUSED = 0x03
-    SHUTDOWN = 0x04
-    SHUTOFF = 0x05
-    CRASHED = 0x06
-
-    def __init__(self, conn, index, name, xml):
-        self._conn = conn
-        self._destroyed = False
-        self._name = name
-        self._index = index
-        self._state = self.RUNNING
-
-    def name(self):
-        return self._name
-
-    def destroy(self):
-        if self._state == self.SHUTOFF:
-            raise Exception('instance already destroyed: %s' % self.name())
-        self._state = self.SHUTDOWN
-        self._conn._removeInstance(self._index)
-
-    def info(self):
-        return [self._state, 0, 2, 0, 0]
-
-    def XMLDesc(self, flags):
-        return open('fakevirtinstance.xml', 'r').read()
-
-    def blockStats(self, disk):
-        return [0L, 0L, 0L, 0L, null]
-
-    def interfaceStats(self, iface):
-        return [0L, 0L, 0L, 0L, 0L, 0L, 0L, 0L]
diff --git a/nova/flags.py b/nova/flags.py
index 60245a34..f9ebb28f 100644
--- a/nova/flags.py
+++ b/nova/flags.py
@@ -36,14 +36,13 @@ DEFINE_bool = DEFINE_bool
 # Define any app-specific flags in their own files, docs at:
 # http://code.google.com/p/python-gflags/source/browse/trunk/gflags.py#39
 
+DEFINE_string('connection_type', 'libvirt', 'libvirt or fake')
 DEFINE_integer('s3_port', 3333, 's3 port')
 DEFINE_integer('s3_internal_port', 3334, 's3 port')
 DEFINE_string('s3_host', '127.0.0.1', 's3 host')
 #DEFINE_string('cloud_topic', 'cloud', 'the topic clouds listen on')
 DEFINE_string('compute_topic', 'compute', 'the topic compute nodes listen on')
 DEFINE_string('storage_topic', 'storage', 'the topic storage nodes listen on')
-DEFINE_bool('fake_libvirt', False,
-                  'whether to use a fake libvirt or not')
 DEFINE_bool('verbose', False, 'show debug output')
 DEFINE_boolean('fake_rabbit', False, 'use a fake rabbit')
 DEFINE_bool('fake_network', False, 'should we use fake network devices and addresses')
diff --git a/nova/tests/access_unittest.py b/nova/tests/access_unittest.py
index 8500dd0c..6cf7e893 100644
--- a/nova/tests/access_unittest.py
+++ b/nova/tests/access_unittest.py
@@ -33,7 +33,7 @@ class Context(object):
 class AccessTestCase(test.BaseTestCase):
     def setUp(self):
         super(AccessTestCase, self).setUp()
-        FLAGS.fake_libvirt = True
+        FLAGS.connection_type = 'fake'
         FLAGS.fake_storage = True
         um = UserManager.instance()
         # Make test users
diff --git a/nova/tests/cloud_unittest.py b/nova/tests/cloud_unittest.py
index b8614fdc..8040f633 100644
--- a/nova/tests/cloud_unittest.py
+++ b/nova/tests/cloud_unittest.py
@@ -39,7 +39,7 @@ FLAGS = flags.FLAGS
 class CloudTestCase(test.BaseTestCase):
     def setUp(self):
         super(CloudTestCase, self).setUp()
-        self.flags(fake_libvirt=True,
+        self.flags(connection_type='fake',
                    fake_storage=True,
                    fake_users=True)
 
@@ -72,7 +72,7 @@ class CloudTestCase(test.BaseTestCase):
         users.UserManager.instance().delete_user('admin')
 
     def test_console_output(self):
-        if FLAGS.fake_libvirt:
+        if FLAGS.connection_type == 'fake':
             logging.debug("Can't test instances without a real virtual env.")
             return
         instance_id = 'foo'
@@ -83,7 +83,7 @@ class CloudTestCase(test.BaseTestCase):
         rv = yield self.node.terminate_instance(instance_id)
 
     def test_run_instances(self):
-        if FLAGS.fake_libvirt:
+        if FLAGS.connection_type == 'fake':
             logging.debug("Can't test instances without a real virtual env.")
             return
         image_id = FLAGS.default_image
@@ -104,7 +104,7 @@ class CloudTestCase(test.BaseTestCase):
                 break
         self.assert_(rv)
 
-        if not FLAGS.fake_libvirt:
+        if connection_type != 'fake':
             time.sleep(45) # Should use boto for polling here
         for reservations in rv['reservationSet']:
             # for res_id in reservations.keys():
diff --git a/nova/tests/fake_flags.py b/nova/tests/fake_flags.py
index d32f40d8..5fcd2bca 100644
--- a/nova/tests/fake_flags.py
+++ b/nova/tests/fake_flags.py
@@ -20,7 +20,7 @@ from nova import flags
 
 FLAGS = flags.FLAGS
 
-FLAGS.fake_libvirt = True
+FLAGS.connection_type = 'fake'
 FLAGS.fake_storage = True
 FLAGS.fake_rabbit = True
 FLAGS.fake_network = True
diff --git a/nova/tests/future_unittest.py b/nova/tests/future_unittest.py
index da5470ff..31ec8306 100644
--- a/nova/tests/future_unittest.py
+++ b/nova/tests/future_unittest.py
@@ -39,7 +39,7 @@ FLAGS = flags.FLAGS
 class AdminTestCase(test.BaseTestCase):
     def setUp(self):
         super(AdminTestCase, self).setUp()
-        self.flags(fake_libvirt=True,
+        self.flags(connection_type='fake',
                    fake_rabbit=True)
 
         self.conn = rpc.Connection.instance()
diff --git a/nova/tests/model_unittest.py b/nova/tests/model_unittest.py
index 1bd7e527..b9eb2ac9 100644
--- a/nova/tests/model_unittest.py
+++ b/nova/tests/model_unittest.py
@@ -34,7 +34,7 @@ FLAGS = flags.FLAGS
 class ModelTestCase(test.TrialTestCase):
     def setUp(self):
         super(ModelTestCase, self).setUp()
-        self.flags(fake_libvirt=True,
+        self.flags(connection_type='fake',
                    fake_storage=True,
                    fake_users=True)
 
diff --git a/nova/tests/network_unittest.py b/nova/tests/network_unittest.py
index a822cc1d..45ee6dbc 100644
--- a/nova/tests/network_unittest.py
+++ b/nova/tests/network_unittest.py
@@ -33,7 +33,7 @@ from nova import utils
 class NetworkTestCase(test.TrialTestCase):
     def setUp(self):
         super(NetworkTestCase, self).setUp()
-        self.flags(fake_libvirt=True,
+        self.flags(connection_type='fake',
                    fake_storage=True,
                    fake_network=True,
                    network_size=32)
diff --git a/nova/tests/node_unittest.py b/nova/tests/node_unittest.py
index 93942d79..86d9775f 100644
--- a/nova/tests/node_unittest.py
+++ b/nova/tests/node_unittest.py
@@ -57,7 +57,7 @@ class NodeConnectionTestCase(test.TrialTestCase):
     def setUp(self):
         logging.getLogger().setLevel(logging.DEBUG)
         super(NodeConnectionTestCase, self).setUp()
-        self.flags(fake_libvirt=True,
+        self.flags(connection_type='fake',
                    fake_storage=True,
                    fake_users=True)
         self.node = node.Node()
diff --git a/nova/tests/objectstore_unittest.py b/nova/tests/objectstore_unittest.py
index f47ca7f0..f22256aa 100644
--- a/nova/tests/objectstore_unittest.py
+++ b/nova/tests/objectstore_unittest.py
@@ -25,6 +25,8 @@ import tempfile
 
 from nova import flags
 from nova import objectstore
+from nova.objectstore import bucket # for buckets_path flag
+from nova.objectstore import image # for images_path flag
 from nova import test
 from nova.auth import users
 
diff --git a/nova/tests/real_flags.py b/nova/tests/real_flags.py
index 9e106f22..690fb640 100644
--- a/nova/tests/real_flags.py
+++ b/nova/tests/real_flags.py
@@ -20,7 +20,7 @@ from nova import flags
 
 FLAGS = flags.FLAGS
 
-FLAGS.fake_libvirt = False
+FLAGS.connection_type = 'libvirt'
 FLAGS.fake_storage = False
 FLAGS.fake_rabbit = False
 FLAGS.fake_network = False
diff --git a/nova/tests/storage_unittest.py b/nova/tests/storage_unittest.py
index 60576d74..f400cd2f 100644
--- a/nova/tests/storage_unittest.py
+++ b/nova/tests/storage_unittest.py
@@ -34,7 +34,7 @@ class StorageTestCase(test.TrialTestCase):
         super(StorageTestCase, self).setUp()
         self.mynode = node.Node()
         self.mystorage = None
-        self.flags(fake_libvirt=True,
+        self.flags(connection_type='fake',
                    fake_storage=True)
         self.mystorage = storage.BlockStore()
 
diff --git a/nova/tests/users_unittest.py b/nova/tests/users_unittest.py
index 30172107..824d5cff 100644
--- a/nova/tests/users_unittest.py
+++ b/nova/tests/users_unittest.py
@@ -35,7 +35,7 @@ class UserTestCase(test.BaseTestCase):
     flush_db = False
     def setUp(self):
         super(UserTestCase, self).setUp()
-        self.flags(fake_libvirt=True,
+        self.flags(connection_type='fake',
                    fake_storage=True)
         self.users = users.UserManager.instance()