debootstrap installs a basic Debian system into a directory, for use with
vmdeboostrap is a wrapper around it to install Debian into a disk
image, which can be used with a virtual machine (such as KVM).
At the moment
vmdebootstrap only works on Debian squeeze, since
extlinux on unstable/testing is broken. It'll get fixed, though.
git clone git://git.liw.fi/vmdebootstrap