I am going to scream. What in the heck does this mean? I have scads of RAM. I have scads of drive space, and yet, frickin' Parallels STILL will not run on my MacPro. I don't get it. It runs fine on my macbook pro, but it hates this machine and gives that error constantly. I have yet to see anything from parallels support as to why this happens and how to fix it. right now, this product is unusable for me and I'm very frustrated.
I don't know why it happens but on my Mac Pro the XP's virtual machine setting is always set to Manual after I've run the Compressor. To set it back to automatically, go to My Computer->Properties->Advanced->Performance Settings->Advanced tab->Virtual Memory Change. In there, select the System Managed Size option and click on Set button. You may need to reboot for it to take effect.