It seems as if Parallels is interfering with proper DNS resolution on my Mac. I am using Mountain Lion and Parallels 7. As soon as I installed Parallels, DNS got very flaky on the Mac side. Sometimes it takes killing mDNSResponder to get things right again. Is anyone else having this problem? Any suggestions here? I am about to uninstall Parallels.
I'm having the same or similar problems. Neither shared (my usual setting) nor bridged (to ethernet or wifi) networking works having upgraded to Mountain Lion and Parallels Build 7.0.15106. Windows Network Diagnostics says "The DNS Server isn't responding". Everything seems fine and as normal on the Mac side.
^ I've fixed this. For some reason, my Windows DNS was set to a fixed (non-working) address (I would have thought the 'shared network' VM setting would have over-ridden that). I set the Windows setting to automatic, and everything was fine. And this setting was remembered across Windows and Parallels restarts.