Ok, so we found a "solution" that I thought I'll share in case this thread pops up in a future search.
The problem was that our Redhat 5.x guests still run with a kernel that lacks the "tickeless" feature, meaning that they are poking the host a 1000 times per second even if they haven't anything to do.
Disabling hyperthreading and most importantly, adding the parameter "divider=10" to the kernel boot line in grub does indeed lower the cpu utilization in the hosts almost to 0% when idling.
In our case we use the command
sudo /sbin/grubby --update-kernel=ALL --args="divider=10"
To upgrade the /boot/grub/grub.conf file and then we restart the vm.
Thank you everyone for the help.
Xavier