I just updated to Parallels 7 on my MacBook Pro, running Windows 7 as a Bootcamp Partition. If I boot directly into Windows (e.g. not using Parallels), everything is fine. If I go to the MS Genuine website and ask it to validate my installation, it tells me it is a genuine Windows installation. However, if I run under Parallels 7, MS insists it is not genuine. Everything worked fine under Parallels 6. I tried re-installing the Parallels Tools...this did not help.
Looking for same answer Not sure if this is the right answer but since noone else is answering this... What I've found under a Microsoft Forum is that running the same Win7 instance from BootCamp and from Parallels is considered two separate machines (by MS) and hence needs two licenses. The problem is that it is the same instance of Win7 so you cannot enter in two licenses... what a catch 22. MS is claiming that Virtual machines are separate machines requiring separate licenses. For me, this means that I have to stop using Win7 from both places (BootCamp and Parallels), which as you indicated worked fine in Parallels Desktop Mac v6 but doesn't work in v7. Each time I try to fix it and go back to using Win7 the other way, it says it's not genuine and needs re-activation .... until you run out of chances and you have to call MS to get a new activation key. I thought using Win7 from either BootCamp and Parallels was genius and so useful. Now I probably have to give up Parallels as I sometimes really need to boot from Win7 without OSX around.
Finally! An answer to fix Win7 Activation issues when using BootCamp and Parallels (and a great one at that!)... http://kb.parallels.com/en/9703 posted Feb 27, 2012. Requires at least Parallels Desktop 7 for Mac Build 7.0.15050 and higher. Allows two separate Product Activation codes or the use of the same one (once in BootCamp and once in the Virtual Machine). Hooray, I can use my Woin7 in either BootCamp or Parallels again!