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Normally pressing the Fn key along with the function key itself reverses the action of the F-key. So if they're set to do brightness/volume etc...
Sorry, no experience of fixing it, but I get the same with Ubuntu under Parallels 2.5 (3214.0). The only workaround I've found so far is to use...
The PVA works but with a few caveats. I get a message saying "Unable to open device/file /dev/hda" whenever I boot the VM. Most problems...
The workaround for installation with the Mac version was to change the OS Type/Version of the VM to Solaris/Other Solaris.
I've had all sorts of problems with Ubuntu 7.0.4 in Parallels 2.5 (Build 3214.0). You can't install it unless you pretend you change the VM...