Pointsec Encryption Software & VM - URGENT!

I am currently running Windows XP virtual machine on my Intel Mac Pro OSx Leopard. My company is doing a global install of Pointsec encryption software. Running Parallels Desktop 3.0 build 5608.

What is the safest way to get this done? Should I attempt to let Pointsec install itself on the Virtual machine?

Should I try to let Pointsec install on the old PC, and then try to transport it into a new virtual PC?

Any help greatly appreciated as this is big implemented in the next day or two, and I have no recourse with IT department internally.

 

As a first backup VM, copying VM folder to safe place when it is stopped,
after that you can try

 

Will do the backup. Actually, maybe the Time Machine errors I get (Unable to complete Backup) are because the VM files are always in use...