I have a Ubuntu 10.04 x64 Server as my KVM host.
Does it matter if my guest instances are x86 or x64 kernels if I plan to allocate less than 1gb of ram per instance? Also, does it matter if I use a different version of Ubuntu for my guests (10.10, 11.04)?
64-bit hosts can support both 32-bit and 64-bit guests (incidentally, 32-bit hosts can only support 32-bit guests). As for the version of the guest OS, you can use whichever version you like, as well as other non-Ubuntu distributions.