Parallels functions quite well for it's intended purpose: utilizing Windows (or other OS) applications from a Mac without a reboot. As for compatibility, I can't speak for others, but every Windows application I've needed to use has worked flawlessly, so long as Windows was set up correctly. Performance has been very solid, and has only gotten better in recent revisions (especially some graphics-intensive operations).

On the down side, though I personally like coherence mode, sometimes Parallels has gotten a bit "heavy" with making everything TOO seamless. For example, when it registers various Window programs to open my Mac files. Sure, there are settings to control and modify that, but out of the box it tries to put Windows on an equal footing with OSX -- but almost seems like it is hijacking my Mac instead of the intended goal of making it all fit together.

That aside, I've had a better overall experience with it than either of the alternatives that I've tried, and though it's goal is to let you run Windows (etc.), the Mac part is reasonably clear and follows most of the Mac interface guidelines.