Configuring boot order

My problem is two fold when I stat parallels and plug in the usb iGet a message that says it is being used by another application basicly when it goes to the mac desktop also if I add a hard drive the usb is not an option. I am running windows xp on the vm
 
Confirm.
+Attach you hard Drive to MAC (do not assign to OS, leave it unmounted)
+Create a new VM , choosing the final OS your external USB hard drive will boot.
+Choose to 'customize' you VM after creation.
+Remove the Hard Drive created by default
+Add a new Hard Drive of type 'Boot Camp'
+Location should show your attached bootable USB drive , choose it
+Customize the other settings as needed (Net,Memory..)
+Boot it.

Note: it may be needed to change the 'Location' of your drive from
IDE,SATA,SCSI...

Please post your findings.
 
Are there new updates for the PXE booting?
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