Upgrading PD 3 or creating new VM does not work

I tired converting my existing PD3 Windows XP install yesterday. Let it run for 24 hours and nothing. I canceled that and started a clean install almost 2 hours ago and it has been at the same point for at least 90 minutes of that.

 

Please specify what build of Parallels Desktop are you using? As I can guess from the screenshot it is Parallels Desktop 4.0, but is it 3540?

 

It is the latest version. I just purchased the upgrade yesterday and so far I am not happy with the upgrade.

 

It is hte latest version. I just purchased the upgrade yesterday and I am not happy so far.

btw... It is still sitting at the same spot

 

It looks like the issue is been caused by Parallels Desktop being unable to create a configuration file on your hard disk. This may be caused by either lack of space or insufficient user permissions. Please make sure you are trying to create your Virtual Machine logged in as the administrator. If you are an admin and have enough space on your hard drive I would recommend you to submit a ticket with our technical support department so that they may assist you further. To submit a ticket please follow this link: http://www.parallels.com/support/desktop/request/