I'm using a MBP 2.0 / 2G
I'm using a home and work Wifi. Both use WEP.
Now that Windows Update has finished, I'm not seeing the problem. So, I now think it could be any of the following:
1) Windows Update was loading the network driver in a way that made it unhappy. (I actually had to plug into eithernet and reset my network connection from en1 to en0 to get windows update complete.
2) Resetting form en1 to en0, saving, resetting back to en1, saving, somehow fixed whatever was wrong.
3) The Windows Update files in some way made the Parallels drver more stable.
4) I disabled sound. (I have not clue how this would affect things, but I did it so I listed it.)
In any case, I haven't been having the dropout for a few hours now. I'm not sure what exactly fixed it, but I'm happy. Hopefully the Parallels test team can isolate whatever the cause was from above. Even if it is 3 it would be nice to know in advance you must install XP using en0 and get all the various Windows updates before using en1.