Reference: bnc#885380
Xen no longer supports vmdk and never supported qed.
See /usr/share/doc/packages/xen/misc/xl-disk-configuration.txt
Index: virt-manager-1.2.0/virtManager/addhardware.py
===================================================================
--- virt-manager-1.2.0.orig/virtManager/addhardware.py
+++ virt-manager-1.2.0/virtManager/addhardware.py
@@ -762,11 +762,14 @@ class vmmAddHardware(vmmGObjectUI):
         combo.set_model(model)
         uiutil.init_combo_text_column(combo, 0)
 
-        formats = ["raw", "qcow2", "qed"]
         no_create_formats = []
-        if not vm.stable_defaults():
-            formats.append("vmdk")
-            no_create_formats.append("vdi")
+        if vm.conn.is_xen():
+            formats = ["raw", "qcow2"]
+        else:
+            formats = ["raw", "qcow2", "qed"]
+            if not vm.stable_defaults():
+                formats.append("vmdk")
+                no_create_formats.append("vdi")
 
         for m in formats:
             model.append([m])