I just bought Parallels from the Apple store, installed it and an old copy of XP Pro. I just spent a lot of time doing the updates all the way to SP2. While waiting for the updates, I started poking around the online documentation and realized that the CD in the box contained an older version. After the XP updates, I tried to update Parallels itself from the Help menu. It downloaded the new version and I ran the install/upgrade. Now Parallels opens up and immediately goes to the setup assistant. When I click cancel Parallels shuts down. I moved the top window to see Now I cannot get my install of XP to run. I see the files under /documents/parallels/winxp Please tell me I don't to go through the XP install all over again!
Open an OS X Finder window and visit your Parallels folder. There should be a pvs file in there (winxp.pvs), and you should be able to double-click on it and have it load Windows. When Windows starts it will need to have the new Parallels Tools installed. But! First make a backup of the winxp folder!