It turns out there are 2 different builds of OS X 10.4.7 shipping on new Mac Pros. You can find the build number by opening "About This Mac" and clicking on "Version 10.4.7." The 2 versions are build 8K1079 and build 8K1124. I have a 2.66 Ghz Mac Pro w/3 GB RAM, and I keep getting kernel panics with the latest version of Parallels. My build of 10.4.7 is 8K1079. Those running Parallels without problems: What is your 10.4.7 build number??? Thanks!
Same here, Mac OS X 10.4.7 (8K1079). No KP's after setting maxmem=2000 and getting rid of cisco vpn client.