You can read a little background on Virtual Machine Manager Self-Service here. There are several steps for setting it up. Some early adopter customers have had some trouble once they have installed the Self-Service portal. Often, the admin will go to the portal, and try to login to check out how the web-page works.
1) Admin creates a self-service policy that grants a user/group a set of actions within the scope of a hostgroup (and any sub-hostgroups). If the admin chooses to allow the members of the policy to create VMs, then the admin must also associate 1 or more templates to the policy.
2) For any existing VMs, the admin must set *BOTH* the VM Owner property to be the user (or an AD security group to which the user belongs) and the VM self-service policy property of the VM to be the self-service policy created in step 1 above. In addition to these VM properties, the VM must also be on a host that is within the hostgroups covered by the policy.
3) If the user has the create VM privilege, then the self-service portal will expose the New Virtual Machine action and the user can create a VM whose Owner and self-service policy properties will be set appropriately.
So, to troubleshoot this scenario you need to verify
Is the VM on a Host in that lies within the hostgroups covered by the user’s self-service policy
Is the VM owner field set to the users identity (i.e. contoso\AlYoung )
Is the VM self-service policy property set to a policy to which this user belongs