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I think I tracked down part of the issue- I was trying to upgrade from Windows XP Professional to Windows Vista Home Ultimate Edition. Apparently...
Make sure you select Prepare Machine for Vista (or something like that) from within Parallels (the virtual machine has to be fully up and running)
Count me in as having this issue as well. I upgraded to Vista several months ago using OS X 10.4 Tiger and an older version of Parallels (don't...