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flat_network_bridge should be the vSwitch name on the hypervisor you want to carry the instance traffic. flat_interface should be the interface on your VM running OpenStack that connects to your VM traffic network I mentioned above.

Don't create a bridge inside your VM running OpenStack yourself, that should happen automatically.

Once you have got the network settings wrong, you need to delete the network (or just reset the whole nova DB) before your new (hopefully correct flags) will work. Then try to launch a VM again, and things should be a bit better.

I hope that helps.