Upgraded to P7. Can't install Parallel Tools

I just upgraded from Parallels 6 to 7. I have two virtual machines. One runs Win 7 and the other runs XP. The Win 7 machine migrated just fine.

But the XP machine cannot go into Coherence mode. I'm *guessing* it's because Parallels Tools is not installed possibly. In window mode I go to Virtual Machine > Install Parallels Tools...

I then get an odd message dropping down that reads:

"Click Continue to connect the Parallels Tools installation CD to this virtual machine and start the installation."

I click continue and nothing happens. Not sure what this means.

Please advise, Thanks.

 

Do the following: click Continue as before, after that go to My COmputer > under Disk D: there should be Parallls Tools CD - go inside and click on autorun

 

Unfortunately, I just looked and there is no disk D.

 

so that ether:
-you need to create virtual cdrom (go to Configure > Hardware > check for CD/DVD - if there i no such - click + and add CD/DVD)
or
-search for Parallels Tools disk - if PT iso is connected you will not be able to find exact "disk D:" name - it would be replaced with Parallels Tools name

 

Thanks for the additional advice. I do see CD/DVD in the Hardware and it is checked for inclusion in boot order.