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The PD memory preferences indicate to Parallels how much Mac memory overall to reseverve for all of your virtual machines. Therefore PD memory needs to be at least equal to the sum of the memory that you've assigned to each VM.
Example: You're running a Windows 7 VM with 1,024 MB and a Windows XP VM with 512 MB (let's assume both VM's have 3D on with 128 MB assigned to video memory). In that case, the PD memory preferences should show at least 1204 + 128 + 512 + 128 MB = 1792 MB, plus add some overhead to arrive at 2048 GB. This would allow you to run both VMs simultaneously as long as your Mac has lots more than 2 GB of memory (the Mac OS needs some memory, plus you may want to run Mac programs, too).
I'm assuming you have 3D on and 128 MB assigned to video memory. For your 4 GB machine running a single 2 GB VM, I'd set the PD memory to 2048 + 128 + 160 MB overhead = 2236 MB. If you assign less than that to Parallels, you will definitely experience swapping - after all, your VM is asking for 2048 + 128 = 2176 MB of memory, but you're only assigning 1150 MB to Parallels. Since Parallels needs the memory but you haven't assigned it, Parallels will use the hard drive for swapping. Again, the 160 MB "overhead" are just guesswork, you may need to play with the settings to find the optimum for you.
If you are using another video memory setting (e.g. 256), you need to figure that into above estimate.
You could of course always use the "Automatic" setting for the PD memory. After playing a lot with the settings, however, my personal impression is that the Automatic setting assigs memory to Parallels very generously. This is why I like to use my own setting.
Good luck!
Last edited: Mar 18, 2010