If you are encountering the dreaded BSOD and IRQL error this worked for me.
http://forum.parallels.com/showthread.php?t=95571
Just change the CPU to 1 and start the VM. After Parallel tools installs and the reboot is done turn off the VM, and change the CPUs back to 2.
Parallels Desktop
Run Windows simultaneously with OS X.
Version: 5.0
BSOD fix
Feedback Type: Troubleshooting Report
Contributed by: armadin Thursday, November 05 2009 @ 09:15 AM PST
Product Platform: MacOSX
Used Product For: Over One Year
System Info:
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