OK, so I now have a combination of things that will successfully PXE boot a Linux qemu-kvm virtual machine with Windows DHCP services and Windows Deployment Services (WDS). I'm using the gPXE CD ISO image to PXE boot the VMs. Now the WDS PXE process works as expected.

We have our WDS/RIS server setup similar to the following wiki article on the syslinux wiki:

http://syslinux.zytor.com/wiki/index.php/PXELINUX#Deploy_Linux_from_Wind...

Here's what I did on my workstation (I'm using Fedora 11):