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Yes, the emulator in VS 2005 seems to work great.
I've used the VS 2005 PPC 2003 emulator without any issues at all under Parallels RC1. Going to try it soon under RC2. Nobody doing PPC dev...
I've read the VMWare is smart in how it redraws the screen which makes it feel a whole lot faster. I've noticed that parallels sometimes does feel...
On my MBP 15, I can't seem to get any left/right two finger trackpad scrolling to work within Parallels. Up/down works fine, but not left/right....