diff --git a/dom0/qmemman/qmemman.py b/dom0/qmemman/qmemman.py
index cf6325a7..7b6f687e 100755
--- a/dom0/qmemman/qmemman.py
+++ b/dom0/qmemman/qmemman.py
@@ -4,6 +4,10 @@ import string
 import time
 import qmemman_algo
 import os
+from guihelpers import notify_error_qubes_manager, clear_error_qubes_manager
+
+no_progress_msg="VM refused to give back requested memory"
+slow_memset_react_msg="VM didn't give back all requested memory"
 
 class DomainState:
     def __init__(self, id):
@@ -13,6 +17,8 @@ class DomainState:
         self.mem_used = None		#used memory, computed based on meminfo
         self.id = id			#domain id
         self.last_target = 0		#the last memset target
+        self.no_progress = False    #no react to memset
+        self.slow_memset_react = False #slow react to memset (after few tries still above target)
 
 class SystemState:
     def __init__(self):
@@ -54,19 +60,34 @@ class SystemState:
 # in fact, the only possible case of nonexisting memory/static-max is dom0
 # see #307
 
+    def clear_outdated_error_markers(self):
+        # Clear outdated errors
+        for i in self.domdict.keys():
+            if self.domdict[i].slow_memset_react and \
+                    self.domdict[i].memory_actual <= self.domdict[i].last_target + self.XEN_FREE_MEM_LEFT/4:
+                dom_name = self.xs.read('', '/local/domain/%s/name' % str(i))
+                clear_error_qubes_manager(dom_name, slow_memset_react_msg)
+                self.domdict[i].slow_memset_react = False
+
+            if self.domdict[i].no_progress and \
+                    self.domdict[i].memory_actual <= self.domdict[i].last_target + self.XEN_FREE_MEM_LEFT/4:
+                dom_name = self.xs.read('', '/local/domain/%s/name' % str(i))
+                clear_error_qubes_manager(dom_name, no_progress_msg)
+                self.domdict[i].no_progress = False
+
 #the below works (and is fast), but then 'xm list' shows unchanged memory value
     def mem_set(self, id, val):
         print 'mem-set domain', id, 'to', val
         self.domdict[id].last_target = val
-        self.xs.write('', '/local/domain/' + id + '/memory/target', str(val/1024))
 #can happen in the middle of domain shutdown
 #apparently xc.lowlevel throws exceptions too
         try:
-            self.xc.domain_setmaxmem(int(id), val/1024 + 1024) # LIBXL_MAXMEM_CONSTANT=1024
-            self.xc.domain_set_target_mem(int(id), val/1024)
+            self.xc.domain_setmaxmem(int(id), int(val/1024) + 1024) # LIBXL_MAXMEM_CONSTANT=1024
+            self.xc.domain_set_target_mem(int(id), int(val/1024))
         except:
             pass
-    
+        self.xs.write('', '/local/domain/' + id + '/memory/target', str(int(val/1024)))
+
     def mem_set_obsolete(self, id, val):
         uuid = self.domdict[id].uuid
         if val >= 2**31:
@@ -156,6 +177,7 @@ class SystemState:
         if os.path.isfile('/var/run/qubes/do-not-membalance'):
             return
         self.refresh_memactual()
+        self.clear_outdated_error_markers()
         xenfree = self.get_free_xen_memory()
         memset_reqs = qmemman_algo.balance(xenfree - self.XEN_FREE_MEM_LEFT, self.domdict)
         if not self.is_balance_req_significant(memset_reqs, xenfree):
@@ -163,8 +185,44 @@ class SystemState:
             
         self.print_stats(xenfree, memset_reqs)
 
+        prev_memactual = {}
+        for i in self.domdict.keys():
+            prev_memactual[i] = self.domdict[i].memory_actual
         for rq in memset_reqs:
             dom, mem = rq
+            # Force to always have at least 0.9*self.XEN_FREE_MEM_LEFT (some
+            # margin for rounding errors). Before giving memory to
+            # domain, ensure that others have gived it back.
+            # If not - wait a little.
+            ntries = 5
+            while self.get_free_xen_memory() - (mem - self.domdict[dom].memory_actual) < 0.9*self.XEN_FREE_MEM_LEFT:
+                time.sleep(self.BALOON_DELAY)
+                ntries -= 1
+                if ntries <= 0:
+                    # Waiting haven't helped; Find which domain get stuck and
+                    # abort balance (after distributing what we have)
+                    self.refresh_memactual()
+                    for rq2 in memset_reqs:
+                        dom2, mem2 = rq2
+                        if dom2 == dom:
+                            # All donors have been procesed
+                             break
+                        # allow some small margin
+                        if self.domdict[dom2].memory_actual > self.domdict[dom2].last_target + self.XEN_FREE_MEM_LEFT/4:
+                            # VM didn't react to memory request at all, remove from donors
+                            if prev_memactual[dom2] == self.domdict[dom2].memory_actual:
+                                print 'dom %s didnt react to memory request (holds %d, requested balloon down to %d)' % (dom2, self.domdict[dom2].memory_actual, mem2)
+                                self.domdict[dom2].no_progress = True
+                                dom_name = self.xs.read('', '/local/domain/%s/name' % str(dom2))
+                                notify_error_qubes_manager(dom_name, no_progress_msg)
+                            else:
+                                print 'dom %s still hold more memory than have assigned (%d > %d)' % (dom2, self.domdict[dom2].memory_actual, mem2)
+                                self.domdict[dom2].slow_memset_react = True
+                                dom_name = self.xs.read('', '/local/domain/%s/name' % str(dom2))
+                                notify_error_qubes_manager(dom_name, slow_memset_react_msg)
+                    self.mem_set(dom, self.get_free_xen_memory() + self.domdict[dom].memory_actual - self.XEN_FREE_MEM_LEFT)
+                    return
+
             self.mem_set(dom, mem)
 
 #        for i in self.domdict.keys():
diff --git a/dom0/qmemman/qmemman_algo.py b/dom0/qmemman/qmemman_algo.py
index b61d9d17..3f807c53 100755
--- a/dom0/qmemman/qmemman_algo.py
+++ b/dom0/qmemman/qmemman_algo.py
@@ -117,6 +117,8 @@ def balance_when_enough_memory(domain_dictionary, xen_free_memory, total_mem_pre
     for i in domain_dictionary.keys():
         if domain_dictionary[i].meminfo is None:
             continue
+        if domain_dictionary[i].no_progress:
+            continue
 #distribute total_available_memory proportionally to mempref
         scale = 1.0*prefmem(domain_dictionary[i])/total_mem_pref
         target_nonint = prefmem(domain_dictionary[i]) + scale*total_available_memory
@@ -212,6 +214,8 @@ def balance(xen_free_memory, domain_dictionary):
     for i in domain_dictionary.keys():
         if domain_dictionary[i].meminfo is None:
             continue
+        if domain_dictionary[i].no_progress:
+            continue
         need = memory_needed(domain_dictionary[i])
 #        print 'domain' , i, 'act/pref', domain_dictionary[i].memory_actual, prefmem(domain_dictionary[i]), 'need=', need
         if need < 0 or domain_dictionary[i].memory_actual >= domain_dictionary[i].memory_maximum:
diff --git a/dom0/qvm-core/guihelpers.py b/dom0/qvm-core/guihelpers.py
index dbda6022..f4c8ff3d 100644
--- a/dom0/qvm-core/guihelpers.py
+++ b/dom0/qvm-core/guihelpers.py
@@ -24,8 +24,11 @@ import sys
 from optparse import OptionParser
 from PyQt4.QtCore import *
 from PyQt4.QtGui import *
+import dbus
+from dbus import DBusException
 
 app = None
+system_bus = None
 
 def prepare_app():
     global app
@@ -53,3 +56,29 @@ def ask(text, title="Question", yestoall=False):
     else:
         #?!
         return 127
+
+def notify_error_qubes_manager(name, message):
+    global system_bus
+    if system_bus is None:
+        system_bus = dbus.SystemBus()
+
+    try:
+        qubes_manager = system_bus.get_object('org.qubesos.QubesManager',
+                '/org/qubesos/QubesManager')
+        qubes_manager.notify_error(name, message, dbus_interface='org.qubesos.QubesManager')
+    except DBusException:
+        # ignore the case when no qubes-manager is running
+        pass
+
+def clear_error_qubes_manager(name, message):
+    global system_bus
+    if system_bus is None:
+        system_bus = dbus.SystemBus()
+
+    try:
+        qubes_manager = system_bus.get_object('org.qubesos.QubesManager',
+                '/org/qubesos/QubesManager')
+        qubes_manager.clear_error_exact(name, message, dbus_interface='org.qubesos.QubesManager')
+    except DBusException:
+        # ignore the case when no qubes-manager is running
+        pass
diff --git a/dom0/qvm-core/qubesutils.py b/dom0/qvm-core/qubesutils.py
index 83bdc407..b29559ba 100644
--- a/dom0/qvm-core/qubesutils.py
+++ b/dom0/qvm-core/qubesutils.py
@@ -341,7 +341,7 @@ def block_attach(vm, backend_vm, device, frontend=None, mode="w", auto_detach=Fa
                 return
             elif int(be_state) > 4:
                 # Error
-                error = xs.read('/local/domain/%d/error/backend/vbd/%d/%d/error' % (backend_vm.xid, vm.xid, block_name_to_devid(frontend)))
+                error = xs.read('', '/local/domain/%d/error/backend/vbd/%d/%d/error' % (backend_vm.xid, vm.xid, block_name_to_devid(frontend)))
                 if error is None:
                     raise QubesException("Error while connecting block device: " + error)
                 else:
diff --git a/dom0/qvm-tools/qvm-run b/dom0/qvm-tools/qvm-run
index d83236cd..8292e0cd 100755
--- a/dom0/qvm-tools/qvm-run
+++ b/dom0/qvm-tools/qvm-run
@@ -23,6 +23,7 @@
 
 from qubes.qubes import QubesVmCollection
 from qubes.qubes import QubesException
+from qubes.guihelpers import notify_error_qubes_manager
 from optparse import OptionParser
 import subprocess
 import socket
@@ -89,6 +90,7 @@ def vm_run_cmd(vm, cmd, options):
     except QubesException as err:
         if options.tray:
             tray_notify_error(str(err))
+            notify_error_qubes_manager(vm.name, str(err))
         print >> sys.stderr, "ERROR: %s" % str(err)
         exit(1)
 
diff --git a/network/filter-qubes-yum b/network/filter-qubes-yum
index b244f3cf..ee5c777f 100644
--- a/network/filter-qubes-yum
+++ b/network/filter-qubes-yum
@@ -1,4 +1,4 @@
-.*/repodata/[A-Za-z0-9-]*\(primary\|filelist\|comps\(-[a-z0-9]*\)\?\|other\|prestodelta\)\.\(sqlite\|xml\)\(\.bz2\|\.gz\)\?$
+.*/repodata/[A-Za-z0-9-]*\(primary\|filelist\|comps\(-[a-z0-9]*\)\?\|other\|prestodelta\|updateinfo\)\.\(sqlite\|xml\)\(\.bz2\|\.gz\)\?$
 .*/repodata/repomd\.xml$
 .*\.rpm$
 .*\.drpm$
diff --git a/rpm_spec/core-dom0.spec b/rpm_spec/core-dom0.spec
index 918164f9..95aa56d2 100644
--- a/rpm_spec/core-dom0.spec
+++ b/rpm_spec/core-dom0.spec
@@ -265,6 +265,10 @@ if [ "x"$HAD_SYSCONFIG_NETWORK = "xno" ]; then
     rm -f /etc/sysconfig/network
 fi
 
+# Remove unnecessary udev rules that causes problems in dom0 (#605)
+mkdir -p /var/lib/qubes/removed-udev-scripts
+mv -f /lib/udev/rules.d/69-xorg-vmmouse.rules /var/lib/qubes/removed-udev-scripts/
+
 %clean
 rm -rf $RPM_BUILD_ROOT
 
@@ -287,6 +291,8 @@ fi
 %triggerin -- xen-runtime
 sed -i 's/\/block /\/block.qubes /' /etc/udev/rules.d/xen-backend.rules
 
+%triggerin -- xorg-x11-drv-vmmouse
+mv -f /lib/udev/rules.d/69-xorg-vmmouse.rules /var/lib/qubes/removed-udev-scripts/
 
 %preun
 if [ "$1" = 0 ] ; then
diff --git a/rpm_spec/core-vm.spec b/rpm_spec/core-vm.spec
index 3cb6a6b2..de058384 100644
--- a/rpm_spec/core-vm.spec
+++ b/rpm_spec/core-vm.spec
@@ -179,6 +179,9 @@ install -D u2mfn/libu2mfn.so $RPM_BUILD_ROOT/%{_libdir}/libu2mfn.so
 %triggerin -- initscripts
 cp /usr/lib/qubes/serial.conf /etc/init/serial.conf
 
+%triggerin -- systemd
+mv -f /%{_lib}/security/pam_systemd.so /%{_lib}/security/pam_systemd.so.disabled
+
 %post
 
 # disable some Upstart services
@@ -246,6 +249,12 @@ if ! [ -e /lib/firmware/updates ]; then
   ln -s /lib/modules/firmware /lib/firmware/updates
 fi
 
+# Disable pam_systemd - we (hopefully) don't need it, but it cause some minor
+# problems (http://wiki.qubes-os.org/trac/ticket/607)
+# /etc/pam.d/common-* are automatically (re)generated by authconfig, so its
+# modification will not be persistent -> must be done this way
+mv -f /%{_lib}/security/pam_systemd.so /%{_lib}/security/pam_systemd.so.disabled
+
 if ! grep -q '/etc/yum\.conf\.d/qubes-proxy\.conf'; then
   echo >> /etc/yum.conf
   echo '# Yum does not support inclusion of config dir...' >> /etc/yum.conf
@@ -320,6 +329,7 @@ if [ "$1" = 0 ] ; then
     mv /var/lib/qubes/fstab.orig /etc/fstab
     mv /var/lib/qubes/removed-udev-scripts/* /etc/udev/rules.d/
     mv /var/lib/qubes/serial.orig /etc/init/serial.conf
+    mv /%{_lib}/security/pam_systemd.so.disabled /%{_lib}/security/pam_systemd.so
 fi
 
 %postun
@@ -549,6 +559,10 @@ done
 
 /bin/systemctl enable qubes-update-check.timer 2> /dev/null
 
+# Disable D-BUS activation of NetworkManager - in AppVm it causes problems (eg PackageKit timeouts)
+/bin/systemctl disable NetworkManager.service 2> /dev/null
+/bin/systemctl mask dbus-org.freedesktop.NetworkManager.service 2> /dev/null
+
 # Install overriden services only when original exists
 for srv in cups NetworkManager ntpd; do
     if [ -f /lib/systemd/system/$srv.service ]; then