Changing Windows 2003 resolution by resizing VM window

I all,

I just upgraded to Parallels 3.0 and started a VM that has worked perfectly for me since I installed the beta ages ago. Now, when I drag the corner of the VM window to change the screen resolution the OS resolution remains the same and I just get black space around the outside of it.

Anyone able to help?

 

Having resinstalled the Parallels Tools this is now fixed. Sorry if I wasted anyone's time.