I am running osx 10.6.4 with Parallels 5. I updated to 5.0.9370 a couple of days ago. All of the sudden, I am getting this error. Did the update corrupt my windows xp guest machine? What can I do? It says to Contact Parallels Support. I don't want to spend the money. Thanks for your insight!
Was the old VM paused when you updated Parallels? Try creating a new VM using the Hard disks of the old VM?
I did try that. No luck. I have reinstalled parallels with the latest download, and it solved the problem. Mysterious....