I have Parallels Desktop.app and the Parallels folder containing Parallels Explorer, Image Tool, Transporter and an alias of Parallels Desktop all in the /Applications folder. I'm pretty sure I left everything in the default install locations.
Time Machine
I took a look at the install.log and it looks like the updater was trying to update the application it found on my Time Machine volume. Here's the last few lines of the log file.
Feb 11 13:47:12 waldauer Parallels Installer[95942]: GUI found under '/Applications/Parallels...
