How to identify whether the machine supports full-virtual guests?

To run fully virtualized guests, host CPU support is needed. This is typically referred to as Intel VT, or AMD-V. To check for Intel VT support look for the ‘vmx’ flag, or for AMD-V support check for ‘svm’ flag:

Intel

# grep vmx /proc/cpuinfo 
flags           : fpu tsc msr pae mce cx8 apic mtrr mca cmov pat pse36 clflush dts acpi mmx fxsr sse sse2 ss ht tm syscall nx lm constant_tsc pni monitor ds_cpl vmx est tm2 cx16 xtpr lahf_lm

AMD

# grep svm /proc/cpuinfo
flags           : fpu tsc msr pae mce cx8 apic mtrr mca cmov pat pse36 clflush mmx fxsr sse sse2 ht syscall nx mmxext fxsr_opt rdtscp lm 3dnowext 3dnow pni cx16 lahf_lm cmp_legacy svm cr8_legacy

If you have the ‘svm’ or ‘vmx’ flags, then your CPU is capable of fully-virt.