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It was posted today under Announcements and fixes a number of the BSOD errors. http://forum.parallels.com/showthread.php?t=31765

I just installed build 3540 and upgraded my 3.0 VM. The upgrade and tools installation completed without any problems. No more of the BSOD cycling that plagued previous builds! Networking and folder sharing work great and CPU usage is much lower than 3.0.

3.0 to 4.0 VM upgrade success finally! Upgrading my Windows XP SP3 3.0 VM to 4.0 has resulted in BSOD cycling with a STOP 0x000000A5 error every time I tried it. I finally found a workaround that has worked repeatably for me. Start 4.0 choose backup and convert When asked to boot the VM...