I made sure parallels was fully updated. The issue experienced occurs even if a brand new virtual is created under Mountain Lion, but I did initially try un-installing and re-installing parallels tools. I'm going back to Lion for now. I haven't seen anyone specifically complaining about this issue on the retina and parallels 7 yet.
I should also note that I had not loaded any additional software. Base OS, loaded updates, installed Mountain Lion, installed parallels 7, searched for a parallels update (software up to date).
Last edited: Jul 29, 2012