We propose a model for quality-of-service (QoS) negotiation in building real-time services to meet both predictability and graceful degradation requirements. QoS negotiation is shown to (i) outperform conventional ``binary'' admission control schemes (either guaranteeing the required QoS or rejecting the service request), and (ii) achieve higher application perceived system utility. We incorporated the proposed QoS-negotiation model into an example real-time middleware service, called RTPOOL, which manages a distributed pool of shared computing resources (processors) to guarantee timeliness QoS for real-time applications. The efficacy and power of QoS negotiation are demonstrated for an automated flight control system implemented on a network of PCs running RTPOOL. This system is used to fly an F-16 fighter aircraft modeled using the Aerial Combat (ACM) F-16 Flight Simulator. Experimental results indicate that QoS negotiation, while maintaining real-time guarantees, enables graceful QoS degradation under conditions in which traditional schedulability analysis and admission control schemes fail.