I have allocated 4 of my 8 gb of RAM for Parallels, but when I start up my VM, it doesn't seem much faster. It doesn't look like its recognizing/actually allocating the extra RAM. When I check Activity Monitor while running the VM it never goes above 1 gb. Is there something wrong, or something I need to fix?
The RAM allocation determines how much RAM your virtual machine has, not how much Parallels uses. A PC's ability to use more than 2 GB of RAM depends on the OS, the software, and startup settings. There's two places to look in Activity Monitor. There's the Parallels Desktop process, then there's a prl_vm_app process for each running virtual machine. I don't know if any of those processes include the RAM for the virtual machines.