I have all of my VM's in the shared user partition so that I can access XP from my account or from another account. Parallels Desktop works fine in my account, but if I log into another acount and try to access a VM I get a weird message: Virtual machine cannot be started: Unable to get geometry of the virtual hard disk. This has only started in RC2. RC1 had no such problem.
Today I solved the problem. It is a permissions issue. Simply log into the account that created the VM's, and change the VM image from 'read only' permission to 'read and write' for 'everyone'.