I am running RC1 on a 20" iMac with 2GB RAM. When I run the Visual Studio 2005 installer, it gets about 1/3 of the way through the install and then asks for the DVD. Even though the DVD was obviously mounted to start the install, somewhere in the process it cannot be seen. The installer also fails if you try to copy the DVD to a temporary directory on the Mac and then access it via the Parallels Shared Folder, though the install fails immediately while it is copying temporary files. Todd
Also... I should probably mention that I am running Windows XP SP2 with all the updates, including having .NET 1.1 and 2.0 already installed. I did not have the problem another poster mentioned with installing .NET itself. I am also running in dual monitor mode, without the problems someone else mentioned.
Had a similar problem with Office 2003 for windows. I used smb networking (not parallels shared folder) to copy files to the C drive on Xp, then installed from there.
I was able to install VS 2005 just fine using the CDs. You could also try creating an ISO/DMG of the DVD and using that instead.
Not that it helps much, but I installed VS 2005 without a problem. I did not already have .NET 2.0 installed prior to that, but I can't imagine why that would make any difference. Just letting you know that it is possible. Good luck.
I can confirm you that if you make an iso image of your install-dvd then mount the image in the VM instead of using the dvd physically, you will be able to install it without any issue. I had this problem back at RC4 when I first installed Parallels Desktop. I didn't have to re-install it since so I can't comment on similar issue with RC1 or not. My only real need of Parallels is indeed to use VS.2005 to develop and debug on Windows, so be sure I know I could install it: I use it everyday since Parallels Beta 4.