I have installed parallels and I have an installation disk for Windows XP Home Edition. I have put in the product key and it seems to have installed, etc. When it is starting up after the screen the first screen included, the second screen comes up when I choose option 2- boot from CD-ROM. If i boot from harddrive, then a black screen appears with a horizontal grey line on the right side. I do not know what to do. I have tried typing in everything I can think of to move on to the next step, but nothing I seem to do works. Please help!
I would say that you need to install with a 'generic' Windows CD. Using a customized one for Dell machines will mean there will be lots of drivers that'll attempt to be installed that won't find the right hardware for because it's actually running inside a VM.
You can find some good OEM discs on-line... Or find a buddy who has one that is not tied to a key and use your key.